Hmm.  I kinda like this post more than most here, but I disagree with minimizing the importance of profitability in looking at the reality of the PS3 right now.

The PS3 has good momentum right now.  The sales are up, the library is improving, the price point is more friendly and the fanbase seems to be very satisfied.  So what's wrong?  The endeavor is still far from profitable.  That's the black mark.  This being Sony's 3rd console, to have the effect it has on the division that houses games that we've seen, especially in light of the success that the first two were, gives that black mark a definition that is not flattering at all.  And thought it may not seem likely, such losses at least will make the possibility of a PS4 a subject of serious discussion by tptb.

As far as a number of other comments, as has been mentioned by Torillian before me, games were not part of the poll for a reason.  If they are not profitable, games won't be made because the system will be gone (see history of Sega).  So if you voted for the 3rd option because of that ........... then you played right into my hands.  Muuuuaaahahahahahahaaa!!!!!

well first off, passing the 360 in sales doesn't give them second place in my eyes. this gen has been a basement finish for sony in terms of success. once you dig yourself a pretty big hole you usually don't get out of it.

secondly profitability doesn't matter to me because sony is a big enough boy to deal w/ the losses and not make it affect what they give us in terms of services and games. they've profited in the past and know how to do it in the future. so this bad gen shouldn't change much for them. in fact we learn from our mistakes so it should only make them smarter in how to treat the fans properly, for our benefit, and their profit.

so i care for neither. all i care about are the games which they have done well as of recently and hopefully in the near future

Not sure where you get the idea that I think the importance of profitability should be minimised. I just don't think beating Sony over the head with the multi-billion $ loss stick (or rather Sony beating itself over the head with it) is particularly constructive. In many ways the Slim launch (or in Sony's PR terms the PS3 re-launch) is a bit of a do over. Those billions lost on the phat are gone and no re-launch is going to put the whole PS3 endeavour into the Black. From a business perspective Sony is probably right to look at Slim launch as a day 1 and think about what the strategy should be from that launching pad. April to Oct 2010 appears to be a period in which PS3 will be selling at a per unit profit, and along with peripherals and games the PS3 has probably been profitable overall for slightly longer than that. From a business strategy perspective there's some rationale for putting the base console back into a small loss making situation provided Sony are confident that they can more than make up for it with game and peripheral sales (nett profitability).

The business case for PS4 will never be argued on the basis of PS3's economic performance, except to the extent that SCE can convince the Sony board of directors that they won't be repeating the PS3 economic performance / business model. So, in a very real sense profitability of PS3 from here on in doesn't really matter all that much, from a lifetime profits perspective PS3 is a lost cause. As long as it's not a nett drain on Sony's bottom line from now on it doesn't matter if PS3 has short periods of the base console selling at a small loss. 

The business case for PS4 will be on the basis that the PS brand is still in a good position with consumers, and PS4 will be profitable at, or soon after launch. All of those elements of the business case depend a lot more on PS3 achieving market share and maintaining sales momentum leading up to the PS4 launch than on PS3 profitability.  

I own shares of Sony Stock so I want profitability as a whole, but I am alright with the way the gaming portion is being run.

Take a loss in one sector to push sales in another (and end up bringing overall profitability) is the ultimate goal. If all sectors were making money it would be awesome (but who does this?)

both are important but we all know what you are up to, so hence i voted for the third option

Profit.
That way the company can afford to invest more in games, while the pressure of being in 3rd will motivate them to try harder to please us gamers.

Profit! Just because of the simple fact that Sony can invest that money in great games.
I don't care if Sony finishes 3rd in the console war; as long as they give me awesome games it is the best console for me.

(btw: Sony will be 1st WW!! ) *just kidding*

The choice here IMHO is obvious. Profit while good for Sony stockholders, etc really means just about nothing for your average every day gamer. As long as Sony makes a moderate amount of cash to stay in business at a standard level, they will continue to make games, consoles, etc and prosper.

The choice is obviously 2nd place WW re-gaining much lost market share which means more exclusive games for the console, capturing more 360 exclusives, and re-establishing itself as a true force to be reckoned with.

Sony doesn't deserve to turn a huge profit this generation. They made a gigantic mistake for pricing their system at 600$ and for that they deserve to not make the profits they could have. Otherwise, they would have cannibalized the market and easily be in 2nd place and very possibly competitive with first place.

Dishing out mad profit to Sony only emphasizes that they didn't make necessarily the incorrect decision at pricing at $600, they just didn't market it well enough, or some garden variety of excuse. They need to learn from their mistakes and come into the PS4 generation with a more market friendly approach (And cheaper entry point).

Good points all around. 

The challenge that I believe Sony is going to have, though, is deciding what a hypothetical PS4 is going to BE.  Obviously, as you stated, if the PS3 is going to be a loss cause as far as recouping the overall investment, SCE will have to have a different business model for the PS4.  The direction that the market is going, though, seems to be a direction opposite of the strengths that Sony has shown in the past (high end graphics, powerful processers, strong 3rd party support).  Motion controllers have ... complicated things in bringing in the sometimes fickle casual market.  And the timing of when the next generation starts is conundrum for all 3 console makers, but maybe especially for Sony.  But next gen (whatever that is going to mean) is going to be the first gen that Sony goes into since the PS1 where there dominance will not be assumed.  It might even be questioned.

The Playstation brand is still very strong, though, as you stated.  A lot of my reasoning in this creating this poll was a response to seeing a lot of talk about Sony dropping the price again down to $200 and I started to question if people really want Sony to succeed or do they want Sony to win.  Did they see the same financials I saw released recently?  Last month, the 360 was up YoY based on NPD numbers and it had no price cut last year.  Why not just let this momentum carry for a while longer before cutting price again and thus risking more division losses?

keep the good games indeed, i am not  stock holder, while we getting a good supply of first party games. GOOD games.

not shovelware.