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I think the next few years of the PS3 are going to be spent with periodic raises in profitability, that almost manage to make the console profitable every time, but increased competition force Sony to bleed money to stay in the race.

Remember, it took the PS3 two major price cuts to go slightly above the weekly sales of the 360, which has only had one smaller price cut, and the Wii is far ahead of rest with no price cut at all.

The Wii doesn't even need one, but the 360 is about to drop prices, and Sony is going to have to decide between getting left futher behind, and losing more money. I expect the pattern to repeat at least a few times before the end of the gen.