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This is probably WAY off base, but could Microsoft's profit and Sony's loss be tempered by the home country of each company? If you take exchange rates into consideration, every console MS sells outside the US(especially in the UK where the rate is 2:1) will return to MS corporate far more profit than one sold in the states. The yen, while also down, doesn't seem as hobbled currently as the dollar, so Sony might see less realized profits coming out of Europe despite it's current situation there(exasperated a bit by the hardware costs.) That's one of the advantages to US companies with a weak dollar. Concievably, MS could cut costs in Others(mainly Europe) and still maintain a realized profits advantage over Sony while making a concerted play at undercutting the PS3's momentum in the region. I'm probably wrong, though...dumb thoughts usually form in my mellon whilst bored.