I know this because I can read.

http://www.eurogamer.net/articles/2011-06-09-how-sony-will-offset-loss-making-vita

<snip>

The price, cheaper than many expected for what is a powerful gaming handheld, is a deliberate attempt by Sony to broaden the Vita's appeal beyond core gamers and technology enthusiasts, Sony Computer Entertainment Europe boss Andrew House told Eurogamer yesterday at E3.

And it's willing to take a hit on each Vita sold because it reckons game sales will compensate.

"We have operated by and large very successfully around a model that works on what we call a blended margin," House said.

"We have very low margins or possibly negative margins on the hardware, offset by a much more attractive margin structure on software and peripherals. We'll manage the business very much in that same way for Vita."

Sony, which makes money on every game sold on its hardware by virtue of a license fee it charges publishers, is yet to announce how much Vita games will cost.

=/= selling hardware at loss

seems like house didn't know the specifics, "very low margins OR POSSIBLY negative margins"

the Vita from what we know is cheap to develop considering it's over the counter parts, that added on top of the mandatory propriety memory card there is no way they are losing money on each Vita sold and at worst they are breaking even, Vita isn't costing Sony anything, though it's not attributing much either at the moment 

Next generation should be advancing AI gaming, if not I feel sorry for 720 and PS4 imo because graphics wont be drastic as before so yeah definitely agree. They need something different in their games for a breath of fresh air.

Well, House cannot provide a specific answer for all regions because financing is not equal in all markets. the Vita is considrably more expensive in the UK than the USA. It would not be surprising if Sony sold the Vita at a very low profit margin in some markets and at a loss in others. Be that as it may, the top guy in SCEE said that the hardware loss is offset by better margins on games and peripherals (including memory cards) which was my point.

1.Just dont like when people put words in my mouth, that's all

2.I didn't quoted you for that? I quoted you because you seem to like this thread, but hate the ones that talk about WU in similar fashion

3.Same as above

4.Wii U is at least announced, PS4 we're not even sure if it even gonna exist...

5.Again, i never said anything on Wii U/PS4 specs rumours, so how can it be my wishful thinking? And also, we still don't know if PS4 is even real...

Read the original artcle for crying out loud. I even quoted him for you. Blatently saying turn a profit, body of sales. It might sound wierd to you because its a japanese translation and is business lingo but its obvious to us.

You people should learn the difference between manufacturing costs and production costs. Every gadget has manufacturing costs, this is the cost of the parts, the labour costs to assemble the parts into the gadget, shippin and packaging the gadgets into stores. These costs are fixed at any time - you know how much the parts cost, how much the shipping company charges etc. As far as manufacturing costs go, Sony is profitable, they get more money for each gadget they sell than the pay for manufacturing it.

As far as production costs go, these costs are NOT fixed. Production costs include R&D, prototyping, "freebies", etc. Let's assume R&D alone costs 100million and Sony gets $1 more per gadget than they pay for manufacturing costs. Obviously it would need 100 million sales until Sony makes any profit on the hardware, or assuming 10 million units are sold, it would take 10 years until the gadget gets profitable.

Now Son has planned to be profitable in three years. Since we don't know how many units Sony plans on selling in those three years or how high the R&D costs actually were, we could only guess those numbers by counting the actual sold units with the actual margin or wait until Sony announces profitablity and then "count backwards".

This definition of profitability is based on the hardware alone (like sales of "normal" electronic devices, and is most likely the correct one. Of course you could add profits selling software and peripheral stuff to this equation -but the idea is incorrect as this stuff also has manufacturing and production costs.

All we can say is that in three years (if thing go well), Sony sells the gadget profitable on the production level, not on the manufacturing level only. I hope this was clear enough because I have somewhat lost my train of thoughts...

1. It's not like they are suddenly going to make the Wii U as big as an original X-Box.

2. That blows, and hard drives are small. I have 500GB right here and it's only marginally bigger then my smartphone

3. Every console has an external surge protector. Heck my 360 power converter/surge protector is bigger then my Wii.

Final - Who cares, regardless of size, I don't think it will be that much more powerful then current HD consoles. I think Wii U compared to 360 will be similar to Wii compared to XB.

1. True, but is still 40% bigger than a Wii and the design is still not final.

2. A smart phone is actually pretty big, it can represent up to 15% size of a console like the 360 slim or PS3 slim

3. the PS3 slim DOES NOT have a external surge protector, it is included inside the console and as you mention it can represent up to 30% of the actual size of the product.

Sooo, a PS3 with the surge protector on the outside and without a hard drive will be actually be up to 5% SMALLER than the design of the Wii U shown last year at E3. And the PS3 slim is a 3 year old design, if they wanted they could make a PS3 even smaller, actually if they could make the heat disipation better, that fan in the PS3 slim is gigantic.

lol with Nintendo's design they can fit a monster in the WiiU