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@persistanthug

1. If memory serves me correctly the PS3 had five price drops in its first year on the market. Two in North America, two in Europe, and one in Japan. Which started out cheaper then the rest anyway. Without those the console would have bottomed out, and died quickly. Major developers threatened Sony in public that they would with withdrawal their support of the platform without those price cuts.

2. Even with the price cuts the machine as a pure game console wasn't very attractive. It really didn't have a lot of games. All of the major exclusives were ages away at that time. Thankfully for Sony their price cutting made their console the cheapest BluRay player on the market. The early software attach ration was somewhat proof that a good number of units were purchased primarily as movie watching devices.

3. While Microsoft spent a billion dollars to repair the hardware failure fiasco. The system itself has generated a very impressive profit for the company. Wiping out that loss many times over. The major difference between Microsoft and Sony is this. Sony is passing on savings to regenerate its customer base on its current platform. While Microsoft has funneled the wealth into building the brand. Which they have been busy about the past few years. Microsoft has been building, and buying studios at a impressive rate. Microsoft has basically eliminated the software gap moving into the current generation. They now have as many studios as Sony.

4. Seeing as the Xbox/Xbox 360 are actually sheltered within a larger division. Your last statement isn't fact but pure speculation on your part. The division houses a lot of different product lines, and the amount of money just going into pure research and development is also unknown. Besides I have never heard a cacophony of cries for Microsoft to discontinue the brand. Unlike some companies Microsoft has a way of always coming up jackpot for the investors.