if there was ever a £199 price point for a ps3, 360 would fall back big time!

What he probably means is:

Combined Revenues from PS3 >= Combined Expenses from PS3

The doesn't mean that they're even close to breaking even on the PS3 hardware; if you look at the fact that (in Europe) they're averaging 5 games sold every week for every PS3 it implies that they're still losing quite a bit of money per system.

 i didn't say that they r breaking even... i just said that PS3 ecosystem is self sustaining... ecosystem means including games revenues, blu-ray revenue etc.

Oh come on...they knew the poor sales wouldnt last forever. They were just being cautious, like they are with the 10 million prediction for this year.

Its called reading between the lines

When was the interview. Either it's old or he is unaware the GTA IV is not in the pipeline, it has come and mostly gone ..... WITHOUT the big boost in PS3 sales that he seemed to expect.

"Moving on to the PlayStation 3 and its bumpy ride at market. Stringer admits the device had a rough time of it in the beginning–”It was on life-support for a while”–but says it’s in good shape now, adding that Grand Theft Auto IV and some other games that are in the pipeline that make good use of the PS3’s processing power will really give it a boost soon. "

The only reason why the 360 is still alive in europe and not totaly extinct in japan is because of the PS3's price point .

By the way, given Sony's reputation, their investment, the rate they were hemorrhaging red ink and the dismal sales compared to their expectations to jump right in to PS2's shoes; life support is a fairly generous description. A harsh one would be DOA, which did appear in the trade papers.

When you're bragging that disappointing sales are a good thing because you lost less money than you expected - you're in serious trouble. When you still have to recover monstrous development costs and the huge deficit in addition to all the normal costs of doing business and you are forced to keep cutting prices until the profit margin is razor thin, if at all and you're heading into economic hard times ..... the patient is not out of the woods yet.

So let's not pretend that everything is going according to some Sony master plan. They had a disastrous start and haven't made up for it yet. The good news is Microsoft isn't that much better off with what RRD cost them and declining sales and growth. The bad news is their other competitor is Nintendo.

It doesn't make much sense to translate this statement into "PS3 is now breaking even or turning profit". That's not what Stringer meant.

Sony turned a somewhat significant loss in the last quarter. With an obviously profitable PSP and PS2, it has to be the PS3 that is dragging them into the red.

I think this is a sign that Sony is now seeing a path to profitability and that they're confident in current sales trends, nothing more.

It doesn't have to be anything. That is purly speculation on your part. They could have spent money on things we don't even know about.

Lets wait till July to see Q1 financials.

(*PSST* I'm saying Sony could have pulled a MS and put their spendings in the last quarter of a bad year to make up comming quaters look more profitable)

What else could possibly be dragging them into the red?

They list hardware units manufactured, total sales, almost everything that could constitute a loss to the tune of $280m. On top of that loss, you have to factor in the profits from the PS2 and PSP.

There's absolutely no way those losses are coming from anything other than the PS3, unless they have a super top-secret project in the works that costs them ~$500m a quarter (which would basically have to mean a new console or PSP).

Let's just call that... Unlikely.