Sony reported a 68% profit reduction for the 2006 fiscal year.
"Sony announced operating profit of 71.75 billion yen ($596.8 million) for the year ended March 31, down from 226.42 billion yen ($1.88 billion) a year earlier."
Now that reduction was also due to developing and launching the console, so without those, selling at a larger loss would be unlikely to reduce profits further. So Sony would not be at a loss, for the whole company, to reduce the price. Sony would still make money, just about $500 million instead of about $2 billion.
In other words, they can afford it; it just wouldn't be a good idea.
So their best bet is to get the manufacturing costs down ASAP. Yet that would have to be a redesign of the parts (which is done on consoles all the time, even if it looks the same externally), since it isn't selling fast enough for volume to reduce the price.
A flashy-first game is awesome when it comes out. A great-first game is awesome forever.
Plus, just for the hell of it: Kelly Brook at the 2008 BAFTAs
