Based on the financial reports, MS is making about $100US per 360 (hardware) - whereas Sony is still losing $100-$150US per PS3 (40Gig).

So these advancements bring them closer to parity - which is really what they want/need, before they even consider another price cut.

They have already redesigned the internals once (for the 40Gig) - the changes from here onwards won't be so drastic (for a while yet).

I would say they are happy with hardware sales at this stage - now they just need some more software to drive the sales, before they tinker with pricing again.

thats great news. I would love a PS3 slim for less cash!

 Indeed, but then again; they really have had no choice in the matter, launching at an unfavourable pricepoint and remaining in the red for three quarters of the machines market exposure. They realized they needed to take immediate losses ro recoup in the future, and it really paid off. What appeared to be horrible bussiness decisions (and boy did they hear it) now appears to have been one of the most efficent price shedding processes in the history of the industry. Preferably, the next PS3 SKU will feature full BC, a decent sized HDD and a smaller and less noisy chipset. I remember playing the PS2 slim for the first time, it emitted no sound at all, while my old brontosaurus was snorting and heaving with every small job it was put to work on.

Exactly where do you get these numbers from? There is no way to tell how much the 360's are making because there are too many devices all in one category from thier entertainment division. So basically you assume that the $357 million the entertainment division made is all based on profit from the 360 hardware? In that quarter they sold to customers 4.2 million 360's and that doesn't include that they count sold to retailers not customers so that # would be much higher. I highly doubt that, more likely they are making about $25-50 per console if not less and the rest of profit is off software sales and zunes etc.

I do believe Sony is still losing $100 per system as estimated loses during that period for the PS3 was about 400 million and they sold according to VG about 4 million units. Of course you do still have to figure in that Sony doesn't count sold to customers they count sold to retailers so I am sure that # is much larger then VG's number.

While I am not trying to offend or get into an argument over this I think last quarters #'s are too hard to really tell which company is making what off what system. This quarter should be much easier with software sales and other devices sales down it should make it easier to tell what each system is making at that point.

does this mean lower development costs