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They simply can't make money on the PS4 and keep it competitive with the XBox 720.

Sony has the yen problem working against them too, MS can get better tech for the same amount of money Sony spends, because they're not bound by the yen/dollar fluctuations.

This is a large reason why I think the Wii U is taking a small loss, even though the hardware chipset is fairly mediocre for late 2012.