I'm the biggest critic of sony's new strategy I know. I think both the PSP and PS3 have been long chains of bad mistakes.
However, sony has sat back and reevaluated their strategy. And simply put they are coming up with some really good ideas.
To enumerate:
1)PSP/PS3 functionality
2)Buying small innovative studios and getting interesting software, like LBP
3)Free anf functional online. For free I can play 42 players on resistance, for 50 a year I can play 16 on Live.

I think sony will come back by the end of the generation for a strong 2nd place position. The one we need to worry about is Xbox. Will there be another?
There is evidence that the answer may be no.
1)MS' firesale of game studios.
2)Xbox faltering in other markets
3)the push for free live. pretty much the only profit maker.
4)360 sales goal is 1 billion, it will never happen.

Europe will save the PS3.

EDIT: hi! nothing to see here!***

I am assuming Microsoft wrote off the 4 billion dollars to make their financial statements look more attractive to investors. I think it was a smart thing to do. Considering Microsoft's primary focus is software, it makes sense that entering the hardware realm of the home console gaming market would be very costly for them, but it's not like they can't afford it. 

And NO division of Microsoft uses debt financing. Debt is when you borrow money from a lender with the intention of paying back what you originally borrwed plus interest. Microsoft has never ever borrwed money EVER. So there is no reason why anyone should use Microsoft and debt in the same sentence unless they are stating that it doesn't exist for Microsoft. Microsoft is financed 100% through equity.

Most companies use a combination of debt and equity to finance their operations. Microsoft is only obligated to its equity investors. Microsoft doesn't owe any money to any banks or any other financial institution. This is why I think people underestimate just how big Microsoft is. All of these billions of dollars Microsoft spends...comes from their pockets...they do not borrow this money from outside financial institutions.  And whatever money they make...they can reinvest within the company without worrying about paying billions in debt to lenders (because they don't have any).

where at all in there did i say ps3 GTA will sell better "cowboy".. i said the ps3, the PLAYSTATION 3 HARDWARE will still sell more World Wide then 360 hardware as it has been since the end of 2007...... reading is good for the soul cowboy

@jcp, Well I think I just worded it funny, my point was that if Microsofts OS makes 100 billion dollars (made up but simple number) and they're hardware makes 5 billion dollars, that puts them at 105 billion dollars no >_>? However in this case, their OS made 100 billion dollars, and their hardware made -5 billion dollars, making they're total gain 95 billion dollars.

Essentially I'm viewing they're new devision who's sole purpose is ultimately to gain money, is leeching money off the main source to feed... something >_>;;; So far, their gaming and entertainment devision has had literally less than $0 return on it's expenses thus far, and now that the 360 is in fact profitable to make, I'm wondering if it's profits will ever exceed that of the money lost on it's predecessor or it's failure rate. They're software sales are stellar, and we all know that 1st party titles rake a much higher profit yield than a 3rd party. With such high software sales, I honestly wonder why they didn't just have more internal studios.

First, drop the attitude. Being pissed off doesnt suit you.

Second, the way you mentioned PS3 and 360 seemed like you were refering to each version of GTAIV, in other words it was an misunderstanding. So I withdraw that comment.

"They sales have not picked up as expected in the new yr"

lol, sales are expected to pick up in the new year ONCE EXCLUSIVES LIKE MGS4, GT5, Killzone2, Haze, LBP, Playstation Home and later Resistance2 and FFXIII etc. come along (and perhaps a pricecut). Nobody said they would pick up because suddenly the year is 2008. Thinking before posting.

THis is LOL worthy!...

This is only Microsoft's second generation in the hardware home console market. Don't underestimate Microsoft. Most big companies are willing to invest large sums of money into investments that will promote future returns. 

Look at Verizon's FiOS business. Verizon is spending billions to implement their new FiOS network. More money than Microsoft initially sunk into the first X-box. And on top of that...Verizon is actually borrowing huge chunks of that money from lenders. This means Verizon is using billions of someone else's money on a business plan that may fail. Verizon isn't expecting to make back that money immediately, but in a few years...Verizon is betting that its Fios network will turn a major return on their initial investment. Big companies do it all the time..I don't see how Microsoft is any different.

If anything..Microsoft probably has the most leverage and flexibility to do it. Give Microsoft some time...I can assure you that Microsof is not just throwing billions into the X-box devision without a plan. I am sure that Microsoft's development, feature implementation and manufacturing practices for hardware will improve with more experience. Nintendo and Sony are veterans in the hardware game...give Microsoft some time.

And I wouldn't be too worried about Microsoft. Most of its specialties are in software (which have grossly higher profit margins than hardware).