They should end up having even bigger losses as they are going to have to factor in the price cut on the PS3 - they didnt cut prices because they reduced costs that much, they cut them first to clear out the old models, (which they were already selling for a loss) and then cut them on the newer models as well.

Ontop of that, knowing they sell the system for a loss, they also had abysmal software sales this holiday - and the increased number of consoles they sold due to the pricecut(s) and the lack of software will only increase losses. What will be interesting to note is if the rest of the company can counteract that, but the last quarter they cut their profits by more then half because of the games division , so we will see.

 MS can't achieve 500M profit. Halo quarter had sub 100M profit and historically speaking halo quarters always are the most profitable. Granted things will change for this xmas season but 500M best case scenario is overly optimistic.

People are way overrating Sony's gaming profits in this thread. They'll likely post enormous losses again.

They lost 841 million last Q, and that was before they cut the PS3 to 399. Sure, they claim to have realized cost reductions on the 399 PS3, but I would be shocked if the loss wasnt similar, or larger.

In fact, come to think of it, Sony surely sold many more PS3 this Q, so the loss will likely be larger than ever, even if the per unit loss narrows, which imo is doubtful. They could easily be looking at 1.5 billion dollars loss.

Similarly I see a trend to underrate MS profits. MS will likely post a pretty solid profit in gaming. They sold a ton of games, while they did not cut the hardware price much at all.

 Unlike some of our more deceitful posters on this board I won't toy with the "newbs". 

For those who didn't notice I was being extremely sarcastic.  It saddens me to have to point this out, but alas some people just don't have the full context to work from.

First of all, lol @ "Halo Quarter", nice name =)

Second, this is "Halo Quarter" , Halo 3 was only out last quarter for like 3 days so most of its sales and probably most of its hardware push will come in this quarter. Especially when you consider that this is the holiday quarter.

On top of that if you haven't seen this thread, then take a look. Quarterly hardware sales for the 360 show it has already outsold last quarter's 1.59m by more than 2m, and once the last week of the quarter is in it will likely have sold around 4m units this quarter...so it should be child's play to figure out how its profits will have increased.

If MS's profits aren't up in Q3 from Q2 then they are doing something horribly horribly wrong.

 bah fine, edited away. Now it's your turn

 Maybe I made a poor job of explaining myself or you didn't read the post carefully. Quoting myself, "Granted, things will change this xmas season" - stating that this holyday quarter will break the trend of halo quarter being the strongest. Also I'm not quite warm to the idea all those consoles sold this season mean more profits - MS has been severely discounting the 360 to the retailers allowing them to either bundle stuff or offer the console at discounted prices (at least in Europe that's been their practice, sources estimate the bulk xmas discount at 50$ on top of other bulk discounts).

Anyways, that's all moot talk. My point is no way, not even in a best case scenario, MS Devices will post a 500M profit this quarter. 

Nintendo will post huge profits in this upcoming quarter, as usual. *Yawn* Not a whole lot to discuss there, aside from the issue of whether they will make more net income than the rest of the industry combined.

Microsoft is much more interesting. The numbers for this quarter will go a long way towards determining whether the 360 will ever be able to become consistently profitable. This holiday season certainly should have been a healthy one for Microsoft's Entertainment division, but the past track record history is not a positive one. Remember as well that the bulk of Halo sales actually counted in the previous quarter (retailer orders taking place before the game was released to the public). I think the odds are quite good that Microsoft turns a profit, but I don't expect it to be more than $100-$200m.

For Sony, the issue is just how bad the losses will be. I expect them to be substantial. In this past quarter, the PS3 saw a price cut in all regions, a new model, substantial bundled software AND hardware (remember those "buy a Sony TV, get a free PS3" deals?), and bundled Blu-Ray movies (buy a PS3, get 5 free Blu-Ray movies). Speaking from the perspective of the US here, Sony also launched a gigantic marketing campaign for the PS3 and its games; I saw 2 different television ads for the system itself, plus ads for the individual games Heavenly Sword, Uncharted, Ratchet and Clank, and PS3 tie-in ads for multiplatform games like The Simpsons and Assassin's Creed. None of that was cheap.

I actually think that Sony will lose close to or even more money in their Gaming division this quarter than they did last quarter (in other words, ~$800m). Every PS3 sold likely cost Sony roughly $200, to say nothing of costs associated with labor, distribution, advertising, and so on. I guess we'll wait and see what happens. Fortunately, the rest of Sony as a corporation probably did very well, due to strong sales of TVs and digital cameras. The open question is how long the rest of the corporation will be willing to subsidize the PS3.