Being able to argue one way or the other that the PS3 business is profitable or not is in itself showing that the PS3 business is just not as healthy as it should be. At this point in the PS3 lifecycle with the software sales as they are should have the PS3 business producing huge profits. Not an amount that can be disputed. Is the PS3 hardware making money or losing money? Who knows. All we really know that if it is still making money after the price cut it isnt much.

Yes, production costs, and breaking even about it, should just include materials, energy cost and wages for the workers actually involved in producing, packing, warehousing and shipping, and maybe also QA, but not any others, while R&D should be included in the initial costs and all the debt accumulated until HW prodction broke even, and that's the debt for which break even will be reached last, while other staff and marketing are additional costs, breaking even on them just from HW profit can be reached many months after break-even on HW happened, and most probably it's another reason to market the HW mostly while marketing SW too.

Anyhow, Sony's division that produces consoles and portables is still losing money despite PS3 not losing it anymore, because that division includes TVs, that made Sony lose a lot of money, and because it made many acquisitions http://mobile.bloomberg.com/news/2011-12-15/sony-rating-cut-to-bbb-by-fitch-on-financial-performance

For one thing, you cant tell me that those Q2 losses weren't cause of PS3. It was the same quarter of the PS3 price cut. Naturally some of those losses belong to the PS brand. Not saying its ALL cause of PS but at least some of it is. 

Sony gives out sales numbers offcourse but again, they have now made it impossible to tell their level of profitability, if any. 

There's a sub argument going on in this thread about how Americans love the Xbox 360 because it was made by an American company. I don't recall us jumping on the Atari Jaguar bandwagon back in the 90's or anything. Since the debut of the Nintendo Entertainment System, the people of America have been madly in love with the consoles from Nintendo and Sony (and Sega, to a lesser extent). Hell, Sega sometimes did better in America than it did in Japan!

This whole "American Patriotism" thing is some bullshit. We just buy what we like. The 360 is a quality console that does a lot of things right and very few things wrong. That's why it's selling. Discounting all of the business choices that Microsoft made to get their console into the position that it's in today is just wrong--just as wrong as forgetting all of the boneheaded decisions that Sony has made this gen which essentially gave Microsoft an advantage.

Oh, and Nintendo says, "Hi".

If PS3 broke even during Spring 2010, a $50 cut in August 2011 shouldn't have made it lose money again. If they chose a $50 cut instead of a far more effective $100 one, the most likely reason is that the smaller one left it profitable or at worst just breaking even, while the bigger one would have made it lose money again. But these reasonings aren't necessary: the division producing PS3 produces a lot more things, and if you google around, you'll find that analysts blame TVs and acquisitions for its losses.

I feel the need to jump in this whole US buy 360 because it's American / Japanese buy Sony because it's Japanese.

Personally I think this is most likely bollocks for the majority. Sure, some locals will do that in each country, but I doubt the majority.

The 360 sells well is US because it's library and features are popular and appeal vs the PS3. Particularly early on in the gen the 360 have a good Live service and MS saw that in US they could own the demographic that previously focused on PC for online gaming. Sony/PS3 lagged well behind for too long and simply didn't offer the right features when the 360 did. Now 360 simply has the best marketshare.

I'd note that during this the Wii - a Japanese product - by appealing even more than 360 to the even larger general gaming audience outsold the 360 handily (until recently) and very likely took a huge part of that demographic from Sony who actually had a lot of that demographic tied up with the PS2.

Meanwhile in Japan I'd say the situation was reversed. The 360 features/library didn't meet local gaming preferences that well and sold accordingly. The relatively early RROD also no doubt hurt the brand more in Japan than US. The PS3 sold a bit better but not that much until it got the games/features right. Meanwhile, as in US, the Wii, which appealed the most, sold the most.

If you look at it you'll see local markets actually buying the product that appeals through features - not where the HQ was based. And that's just focusing on consoles - cast the net wider to more electronic devices and you'll see the device that appeals wins much more than not irrespective of the company's country of origin.

So can we give the whole patriot, xenophobe thing a rest because the evidence doesn't really support it? If 360 had the best library/features for Japan it would sell the most there - I'm sure of it. Similarly if PS3 had the best features/library for US it would sell the most there.

A final point on that - look at the differences and you'll see that the PS3 sells better in US than 360 in Japan because it has (and has had for a while) a better local proposition than 360 in Japan. Check the 360 spikes early on in Japan when it had the right titles - the problem is MS could never get the mix right in a consistent manner, they had RROD brand damage to overcome (their fault but still it mattered) and finally I think Live being a charged service and holding the keys to other online features wasn't accepted too much in Japan.

Again, the evidence simply shows sales ratios relative to local appeal based on features not country of origin by company.

not really as PS3 had started profiting under $10 in Q1 2010(Jan -Mar)

there on they have had RSX reductions,new ps3 model in with internal redesign and other things such a blu-ray,die,components price falling over time and also by mass production.PS3 just can't lose money.

though what i am trying to say is understand the currency mechanism

for example: a product is priced at highly profitable levels but if the currency exchange rate effects it negatively,even if it is profitabler in manufacturing,when it goes to sell in another country with weaker currency aka Dollar's weakness to YEN,then it might not profit that much or lose.

even with currency mechanism PS3's costs would take take of that or break even or just might lose a bit with external expenses like marketing.