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If the PS3 breaks even, the whole division is profitable. They will drop price, remeber that the PS3 costs less than 399 to make at this point. When the new 65/65 models are released we will see a $350 PS3 this holiday season.

Also, the PS3 has 2 huge first-party games this holiday season. Well also see KZ2 released before the fiscal year ends, along with in game ads, Qore, and other things to lighten the impact of a $50 price drop.

People who believe Sony will keep the PS3 at $399 are crazy, especially when they have forced mid-year price cuts from Microsoft and are finally gaining momentum. There are many ways to counter losses from a price drop. Software is one of them (Socom, LBP, Wipeout, Resitance 2. All first party)