The following is my own personal opinion. I do not claim that 100% of the things I write are facts.

In the food bussiness, many restaurants cut costs by using cheap or low quality ingredients to prepare their meals. That way, they can charge lower prices and still make a profit.

When you have a console with an unusually high failure rate such as the Xbox 360 (I've personally witnessed four of them fried to a well-done crisp) you can only attribute such a faulty performance to either A) Cheap, crappy components or B) Sloppy manufacturing methods.

If MS did cut corners in producing the first few millions of 360s, that must mean they should have made some profit. That, of course, backfired in a big way when they were forced to renew their warranty services to cover all the ''RRODed'' consoles being sent back to them.

I commend Microsoft for fixing the problems (in other words, improving the quality of their console) while at the same time continuing to lower the system's price. They also have a very strong library. (I personally do not enjoy FPS games at all, but other games, such as Mass Effect, completely captivated me).

The RROD fiasco must have put the gaming division deeply into the red. But if the console stops losing its momentum by capitalizing on AAA games such as GTA IV, they will see modest-to-decent profits sometime in the near future.

I see a lot of people pooping on Sony's PS3 numbers and saying that they are no better than the Xbox 360s or worse.

Here is something you guys need to remember, but will never see in a Playstation profit/loss chart. With Playstation 3, Sony won the HD format war, which has the possibilities (im not saying certainty) of making Sony billions in royalties, but like I said, you will never see all that royalty money on a Playstation profit/loss chart, even though they PS3 won the format war for Blu-ray.

PS3 is going to make Sony money on more than one front, unlike the MS or Nintendo. In 10 years we could very well have a very valid argument that the PS3 created more revenue and profit for Sony than any console ever for any company. This all of course depending on Blu-rays success.

People that say the 360 doesn't have a great lineup of games this year are simply blind. Gears of war 2, fable 2, gta 4 with extra content, too human, ninja gaiden 2, splinter cell, banjo 3 (if it gets released) etc etc. Its not like the 360's games have simply dried up. The 360 will have a lot of great sellers this year.

But yes the xbox is in the red. I hope Microsoft can get it out of its hole eventually. Another thing to think about, because of the weakening us dollar the price drop in Europe wont affect the console profitability that much.

 Firstly Nintendo haven't made more in 08 than Sony have in 10 years , get your facts right.

 Despite MS's seemingly infinite reserves of money they still have shareholders , targets and the aim to make a profit . They're not in the business because they're bored.

Been sitting on my harddrive so long I just had to post this.