I don't think it's a PSN thing. The obvious reason is that, if you take only into consideration manufacturing and transport, maybe you can say PS3 hardware is profitable, but the truth is that you have much more costs than those, and you have to account all the personnel, marketing budget, RMA, testing, the games that are not profitable, the R&D, and so on.

Sony lost around 4.5-5 billion on PS3.

So if till the end of the generation sony were to sell 50m more PS3.

Each PS3 would have to bring in 100 dollars profit. If tHe PS3's themselves couild make 20-50 dollars profit.

Sony would only need each consumer to buy 2-3 1st party games to make back that money.

But again that is a long shot.

from APRIL 2009-MARCH 2010

but PS3 was selling at alot of loss till september 2009,

plus there where WAREHOUSING costs for the PS3 SLIMMER version for many monye,

also to sell out of PS3 FAT before PS3 SLIMMER release,they were heavily discounted

PS3 SLIMMER which was making minor loss made more loss in holidays with promotion discount and black friday type sales discount

^^^^^^^^these all must have made big losses for SONY

PS2 and PSP and their software made money but not enough to cover the losses

PS3 software made money but still not enough to cover the big losses on PS3 FAT and PS3 SLIMMER release

PS3 only started making profit that too under $10 between JAN-MAR 2010

the losses sony made consisted losses of the full fisical year so SONY made a loss

atm SONY is making profit on everything,so this quarters results would be profitable

PSN makes a loss but it wouldn't cause them $800m loss,see  my post before this one

SW sales is SONY's chance

in 2008 activision alone paid $500m royalties to SONY plus all the other games and first party

if SONY keep making profit then they can easily make $1b each year.

the reason they had a loss last year because of the heavy losses on PS3 FAT and PS3 slimmer warehousing and release,discounts,etc

you watch too much of Hitchhiker's Guide To The Galaxy xD

We heard the announcement that the PS3 is making a profit about a month ago, IIRC. On the day that they announced that, the profit was approximately 1 cent per console (Sony would have made that announcement as soon as it was true) So maybe $5-8 per console now. Unless I'm wrong about the date that the announcement was made - I'm a bit fuzzy with dates at times

..and in the real world, this was one of the reasons for heavy losses Sony incurred last fiscal year. Had you actually followed the laptop market, you'd have seen how Sony had to write off probably $200-$400mio on their way overpriced Vaio inventory to get it selling again (Sony laptops were dead paperweights in European shops due to being $200-$500 more expensive than equivalent competitor products. And, coincidentally, the laptop stuff was integrated into the Entertainment division at exactly that time...).

I don't think so.  I'd do some more digging but I don't care about this subject all that much.  All I know is that even if they have to cut their profit margins a great deal, the sales boost surely would have made up for it.  After all, highly increased sales at smaller profit margins is much better than no sales at extremely high profit margins.  I doubt they took losses on the laptops because like you said they were already way overpriced and the component/material cost to them would be the same as all other manufacturers.  They should be able to sell for similar pricing to other similar speced machines and still profit a bit.