I agree, if you look at it that way, yes, Sony have lost a lot of market share. But beating MS in total sales is a success nonetheless. I don't think anyone is expecting PS2 like sales.

this OP is ubber shit and this is coming from a ps3 fan !
You tend to forget that in the big picture, all relies on profitability.
And due to that SONY just NEEDS the 360 to the there (not too strong but there). Why ? because the market has been split :
- HD gaming on one side (represented by 360+ps3)
- Casual gaming (represented by wii and to a lesser extend ps2)

When a dev/pubisher decides to make a game, it has to decide the target platform and thus have to choose between the 2 types of platform. They can bring an IP to all platforms for marketing purpose but they will be completely different games (as FIFA for instance).

Taking this into consideration, the budget to make a HD game may be at least twice as much as doing a game on wii. Wii games are selling for $10 less. So in order to reach break even for your game, you need to sell appr 1.8x on HD gaming compared if you would release your game on wii/ps2. So you need a much bigger installed base, even if the tie ratio is higher on HD platforms.
If there would not be 360 now, many many developpers would be jumping out of ps3 devs because they would be kind of assured to not get a profit. Losing an exclusivity is kind of ok (like DMC4 going to 360) : it doesn't hurt ps3 owners. But games can be cancelled, and the first example is MH3, which is just a HUGE licence in Japan. So having 360 here is nice for ps3 because until it builds a strong enough user base, it al least gets all the games released for HD platform, minus a few ones counting for a very small percentage. The danger for ps3 is not from 360, it's from the wii.

Lol. now you're desperately trying to have the last word. Dude, you failed miserably. You were wrong, and it was embarrassing. It happens. Accept it and move on.

Your exact words were 'but the hardware was never profitable', but if you didn't mean it, it's all good. And yes, I did provide a source -

http://www.playstation.com/business.html

You have yet to provide one.

@nature

You say it as if HD consoles are just high definition, its not HD gaming I would call it TRUE GAMING. I do agree that the danger is not the xbox but the nintendo wii. Its made a 10M lead over sony, and still outselling the ps3. This is bad for sony, it just goes to show you if you have a console at $249 ccheaper than the rest with mario it will sell.

 No, you were wrong. You thought that citing units of software sold could prove how much profit was made. You have failed to do that. Your logic was flawed. Stop making up numbers and tell us how much profit was made on the software.

x-man, why are you ignoring the numbers posted in this thread?

he gave links to Sony and everything

prior to PS3 launch, Sony had made 5.5 billion TOTAL from ALL of its video games (ps1/ps2/psp). Now they have lost OVER HALF of that 5.5 billion in the 13 months since PS3 launched...and they just cut prices further which means MORE losses

so they are projecting to have lost EVERYTHING Sony has made in video games by the end of next year!!

that is not a win in most people's books, especially in businesses' books

also, ps2 hardware may NOW make a profit on each console sold, but it didn't prior to 2005...so all those consoles sold prior to 2005 (most of them) lost them money and its very likely that the profit on the consoles since 2005 has NOT yet equalled the loss prior to 2005, so its very likely Sony LOST money thus far on ps2 hardware and so that digs into the software's profits

also, did Sony ever develop any ps2 games that lost money? if they spent millions on development and it didn't sell enough, then they lose money, like any other publisher

I'm beginning to think you enjoy being wrong. It must be a fetish. I wasn't proving 'how much profit was made', I was proving that Sony has made more money on PS1 and PS2 software, then they have lost on PS3 hardware.

Again, i'm right and you're wrong.