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It's fine that Sony realizes they need to make money, but this really provides an easy opening to Microsoft.

They can create a machine more powerful than this and they can afford to take a slightly higher loss for a year or two if need be. As a company they make a profit every year (a big one) because of Windows, so 1-2 years of higher than expected losses from the game division in exchange for control of the living room for the future is a small price to pay.

If the XBox 720 has the best versions of Battlefield 4, Star Wars 1313, Watch Dogs, Call of Duty, etc. due to having a more powerful chipset ... IMO a lot of Playstation 3 owners are going to jump ship to the 720, and MS knows that.

They have Sony right where they want them.