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So 3 million PS3 sales so far has cost them a loss of 200 billion yen in their Games Division. If they sell another 10 million PS3s this might cost them 666 billion yen next year which could put the entire company into the red.

The production cost of the PS3 should drop with 65 nm cell processors and cheaper optical disc drives, but the price of the PS3 will need to be slashed to compete with the 360, which should prolong the losses into 2008.