It's not a slim chance, it's a 0% chance.

If BR takes off and sells loads they might get close or cut it even, but it would need to offset 1-2 billion dollars lost (assuming PS3 eats back a big chunk of the losses). There's 2 possibilities that might make this a moot point anyway. First is that BR may not take off, it may only ever be a small niche. Second is that BR might have won even without the PS3, which is a real possibility.

Why would PS3 have a long life like the PS2? It's not the PS2, it will never be anywhere near as successful as the PS2. Wii will outright dominate the demographic that PS3 will need to command in order to continue to sell any systems that late in its life cycle. Not only that but losing consoles have always died quite quickly when they are replaced, while winning consoles tend to live for another 1-2 years after the next gen version is released

1. First is that BR may not take off Agreed
2. It may only ever be a small niche Agreed, but i think the studios are looking at HD to reduce illegal copies for the short term, because of actual size.
3. Second is that BR might have won even without the PS3. Could have, but HD was more market ready, since all BR models sold prior to 08 (except the PS3) are not compatible with the new discs.
4. Why would PS3 have a long life like the PS2. Agreed, why would it at this stage be better than the PS2. But if it sells more than 40M however then, i think it would sell for sometime after the PS4 if it ha the games to support it, but NOT if it is uncompetitive against the xbox360 at the same time.
5. Wii will outright dominate the demographic that PS3 will need to command in order to continue to sell any systems that late in its life cycle. I think this has merit

I agree alot The PS3 is defiantly in uncharted territory, and i think if i was in Sony's position i would be looking hard at the plan. Do they conceded this round, and try to make as much profit as possible or do they compete with MS on price to hold as much market share as possible at the risk of investors.

 Luckily Sony is not a 1 Show pony, and has other areas that generate profit, but they obviously need to evaluate their position in the gaming industry. Nintendo had enough IP and innovation to survive, Sony may not, so can they really afford to lose market share.

Im optimistic at this point that they could still pull of a small net profit over the life of the ps3. ( only a little optimistic) 

I wouldn't judge anything until earnings come out. There is no way to get an accurate picture based on sales alone. It would be like judging someones wealth based on the type of house they live in.

http://www.ps3fanboy.com/2008/01/11/ps3-production-costs-cut-by-half/

According to that link the ps3 production cost has been cut in half. Idk if sony profits or not from 40 gig ps3 sales but i doubt their losing as much money as may believe. Anyways my point being that sony could do a price drop when the time is needed (MS drops price.) Personally I think sony should drop the price before ms does because theyd be the ones getting most of the attention because they did it first, though i dont think its possible at theis point.

They surely have reduced pricing, however this analysts costs don't take into account packaging, shipping and distribution etc. They will still be losing some money, but obviously not as much. Just remember MS have been doing the same and will always have an advantage.

I think X360 will end up with over 40M
and that is a good thing .. no matter first of second

Wow, that was a very good post madskillz, I think that might have been the first time I totally agree with you. lol

In my mind, the biggest thing that the 360 had going for it over the original box was the simultaneous release of GTA IV, and that hasn't happened yet.

So I'll wait till after it comes out to make a call on that.

PS3 is not profitable but has time to increase its market share. Moreover including a HD player is a great asset for VG owners now!

As I said before, the problem for MS, is that they consider waiting/hesitating with HD format is the best way to win! They were wrong.

In fact with a HD-DVD inside (and from the beginning!), which is cheaper than a BD player, the HD war would continue in tough way now!

But by choosing an add-on (big mistake), they let HD-DVD lose. In fact X360 is now sinking too, even if it s not that clear for all of us now.

Consumers are REALLY interested by the HD player inside the SONY console. And that s why the PS3 took over share markets to the X360.

I forecast a so-so year for MS! You will see! SONY will be largely in front of MS. I don t consider Wii as a HD console.

Just my opinion, but I don t like when SONY push consumers to their own formats (Betamax, MiniDisc, UMDvid and Memory, all failed...). Besides if we want pay more or the higher price, this is a great firm for that! They even like to change their own format when they see the outcome s flat and don t make enough money! Consumers highly advised too!