I don't think turning up a profit will be as hard as it seems.
The PS3 installed base is starting to be big enough for software sales to start counterbalancing hardware sales.
One example :
April 2007 : 372k PS3 sold, 636k PS3 software sold ( incomplete numbers but what VGChartz has). 1.7 software units sold per console.
April 2008 : 682k PS3 sold, 4.1 millions PS3 software units sold( VGCChartz numbers again). 6 units of software sold per PS3.
Keep in mind this is April the month in the quarter without big titles.
May and June will be more like 7 or 8 software units/console with GTA4 and MGS4...
And as time pass this ratio will become bigger and bigger.( I woudn't be surprised if we get to something like 10-12 in 6 months for the holyday period).
Sure PS2 software are slowing down to counterbalance the rise in PS3 software but I can't believe Sony is still making that much per sale of PS2 software these days seeing how most games are priced at 30$ or less NEW....
This rise in PS3 software sales ( which will keep happening as the installed base increase ) will be the key factor in PS3 turning a profit and will be what will enable more price cuts ( I still think we will have at least a 50$ cut around the holydays).
PS : this is the same thing that made the 360 turn a profit last year, once you have over 10-12 millions console out the monthly ratio of software/console sold increases a lot and software start covering for hardware loss...
PS3-Xbox360 gap : 1.5 millions and going up in PS3 favor !
PS3-Wii gap : 20 millions and going down !
