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Complications said:

How though? I know Sony have shut down a few plants, but many of their products aren't selling as well as they have done before, the PSP/PS2 aren't selling as well and its not as if the PS3 is doing Wii numbers every week. Sony are easily capable of producing enough PS3s to sell 200k units at retail each week, so the question is, why are they not?

PS3 sells at a loss, as the billion dollar loss in 6 months shows, they lose more post-slim then they did the year before, the more Sony produce the bigger the loss they make. They have to curb production in order too keep the losses as "managable" as possible. Oh there's plent of 250GB ones because 1) It's less popular because of the higher price 2) Sony doesn't make as large a loss on those than the 120GB ones.

It's a balancing act.