Developers are making money. Some aren't making a lot, and developing has a moderate amount of financial risk involved but that's the industry.

Console makers are different, many times they have chosen to forego profits in favor of market share, but they are many times larger and large enough that they have the financial resources to run negative profits for a little while.

@scottie he probably meant to many mid range games on HD consoles since mid range games on Wii dont cost 15-20 Million.

A company can lose money many years and still remain successful and powerful, as long as the banks and/or the shareholders keep supporting it. Some companies (usually, those without shareholders) never make profit (all the money is spent before the final results are given) and can live like that as long as they provide something that consumers/clients want

cause they love there jobs. is there any other reason to do something you love?

the real question is why don't gamers buy good games? think about it! some gamers are just starting to play god of war1-2.

good point. sony is just now making a profit on PS3 after 3yr's on the market, and PSN still isn't making them any money. im sure there making something on PSN, but not as much as they should?

Sony still isn't making a profit on the PS3 as can be seen from their latest financial report.

Well because some developers like there job other than money. Thought i agree with too many risks developers and publishers this generation is taken.

ok so they will. i don't read financial reports. to long.

The reason to make games (and invest in them) is because there's billions to be made as Nintendo, WoW, and MW2 show.

The problem this gen are two fold - Costs are far too high. There's no PS2. The market is split between three systems and only two are even compatible.

It's okay for big budget games like MW2, GTAIV, Halos, GT5, etc as they'll earn their keep. Occasionally one will flop and that hurts - a lot. It's a big gamble but greed drives companies to make those gambles. Movies do it too.

It's the mid-range games market that really suffering as Wii is a hard system to sell on (most developers don't 'get' the Wii) and HD systems cost too much to develop for. Last gen you could sell 200-500k and make a profit on a mid-range game. Now that same game has to sell twice as much on a smaller user base to be profitable.

Publishers don't really want to make take big gambles all the time but they are having a really hard time finding the balance to make it work. Ubisoft perhaps does it best amongst 3rd parties.