I believe what he means is that when Sony gets $50 for a 12 month PS+ subscription they only account the part of the 12 months as revenue that have already passed, the rest is accounted as a liability since Sony haven't completed their part of the deal and provided a working online network for those coming months yet.

So as an example when someone get a 12 month PS+ subscription on December 1st and the quarter ends on December 31st, only 1/12th of the $50 is actually accounted as revenue, because Sony has only fulfilled 1/12th of its part of the deal. The rest is accounted as a liability cause they still own the person 11 months of PS+.

In the coming quarter Sony then accounts the next 3/12th of the $50 as revenue and so and so, until the 12 month contract is completed.

I guess that is what he had in mind, that being said I have no idea if this is really how it's done with PS+ or Xbox live.

It's probably not incredibly profitable yet, but it's rare for a console to be profitable at all this early on. Consoles are a long term investment.

Silly people. The gaming division is obviously profiting due to the Vita.

Game division performed very well last Q, and PS4 launch is the main reason for that. How is that so hard to understand? And that does mean "Sony making tons of monies on PS4". It just doesn't mean Sony is making a large profit from PS4 hardware sales alone.

And I agree that PS+ subs are probably accounted on the balance sheet in a per quarter basis. If PSN suddenly shut down permanently then Sony would owe subscribers for the months of service that were paid for but not unfulfilled. Of course all those subscribers would be unsecured creditors, so if PSN was shut down because Sony went bankrupt then those subscribers wouldn't see a bean in refunds.

http://www.dualshockers.com/2014/02/06/sony-posts-financial-results-for-the-third-quarter-of-2013/

I didn't read all the pages, so forgive me if what I'm about to say has either been already answered, or already addressed but...

I think the OP has a point. The PS4 by itself is probably a loss, so selling 4.2m of them didn't equate to profit in the gaming division on its own. The PS3 probably accounted for a large part of profits, as I have no doubt each PS3 is sold for profit at this point, and since the PS3 had some major releases on it (GTA V, GT6, etc.), I wouldn't be surprised if Sony's excellent PR was smart enough to say "hey, they won't be able to tell what the difference is, our gaming division has profit, let's focus the profit celebration on the PS4!".

Then they all high-fived as the internet gobbled it up and fanboys decided without any financial evidence that the PS4 is profitable. ^.^

Before the PS4 they were swimming in money?? I don't think Sony has been swimming in money since probably 2006 lol.

But if the PS3 accounted for the profits, why hasn't the games division made similar sized profits in previous quarters when the ps3 sold more? 

I think the games division did well thanks to the 2 million new PS Plus subscribers. 

This is exactly what I was trying to say. Now, Im making some assumptions as Japanese accounting rules are different than ours, but i'd wager they are the same regarding this. As for microsoft, they have no choice, FASB says they can only recognize revenue as it is earned (ie once they have provided the service).

Probably, despite lower sales, an important part of higher profits came from PS3 profit margin growth. A small additional contribution is probably coming from PSV margin too, now it should be dirt cheap to build, and in Japan the cheaper new version was released earlier. About PS4, losses on HW should be very low, it uses affordable components, so taking into account PSN+ subscription and a >2:1 attach rate, and that the largest part by far of R&D costs happened before Q4 2013 (Q3 of Sony FY), its excellent launch and Xmas sales should have brought a nice operating income. Obviously, I'll repeat it again, improved profit margin on HW and large user base meaning excellent SW sales (PS3 is quite regularly WW SW best seller) make me think most of the profits come from PS3, despite lower weekly HW sales.
This said, being easily profitable overall since the start, even by a few dollars per unit, is an excellent omen for PS4, the bloodbath of PS3's first three years (or little less than three, Sony announced it became profitable on HW alone too after more than three years and a half, so it likely became profitable overall some time before, and it will still take a few other years from now to recover initial losses) won't happen again.