I think they were talking about fiscal years when they said that, which makes it even worse (fiscal 2009 starts in April next year).

PSPs don't count. That product is also part of the games division.

As for Blu-ray, the PS3 has definitely helped that gain traction. Time will tell how it all pans out for Sony.

HDTVs, I'm not so sure about. I think those would be selling anyway. It's possible that the PS3 has marginally helped sales but given consumer trends, I think it would have happened anyway.

Still, $3.4b is a lot of money. It's going to be very difficult for Sony to get that back from the PS3 itself.

Anyway, both Sony and MS had their heads jammed pretty far up their asses when they started this generation. I don't see how either of them ever expected to turn a profit.

They assumed the greatest graphical details and processing power would be the keys, so they spent loads to make the systems as powerful as they could, but put on the breaks almost too late to make them affordable.

Nintendo was right on the money about those not being important. Good graphics and processing are enough. Good games come first, same as on the other systems.

EDIT: Again, not knocking anyone. We have emperical evidence that the Wii is making loads more than the other systems, and that it was the higher powered components that made the other systems cost so much.

If they are losing money they should have just looked at Nintendo and copied them.

It was too late. Katuragi had already made the PS3 too expensive, as too many games were too far along by then.

There's a saying in retail:

'There's a few things you need to do first before you can make money, one is inventory the other is your store has to be open.' Canceled games is not a good sign.

DS has gotten to the point where it resembles the PS2 - so many games that your litterally disgusted and thrown in turmoil over what to get, you don't get something thinking you can pick it up next month and boom 2 or 3 more games come out tha you want, add that up and you have 4 games you want. Is that a bad thing? No sir it's not.

This is all incorrect. The 360 has lost ~2.5 billion for Microsoft, and has now posted profits of ~550 million over the last 3 quarter. Second, the PS3 is not about cutting even, according to Sony, they are still losing ~130 dollars per PS3 shipped (although analysts estimate it could be even more).  

 http://www.ps3fanboy.com/2008/05/15/sony-could-be-losing-much-more-than-130-on-every-console-sold/

Without looking over the financials (and going off memory), it's going to be bloody difficult for Sony to make back that money with the PS3.

A few things:

- The PS2 was never a loss leader for this long. To top it off, Sony lost money again last quarter. It's quite possible this will continue for one or two more quarters.

- The PS2 walked into a situation where Sony had been profitable with the PS1. The PS3 walked into a situation where Sony had been profitable with the PS2. It's nearly a guarantee that this will not be the situation the PS4 walks into whenever it launches.

- Sony had the luxury of being market leader in the previous two generations, meaning they had the highest software sales and excellent third party support. They're not going to have the ability to lean on software as heavily for additional profits with the PS3. That means their hardware needs to be profitable ASAP. Whether that can happen is very much up in the air.

It wouldn't surprise me one bit if we see the entirety of 2008 pass by without one PS3 price cut.

Which puts Microsoft in a very interesting situation for the rest of the year. We'll see if they do something about it or do what we're all used to seeing the Xbox division do whenever presented an opportunity to strike, absolutely nothing.

One thing to note about the $130 number:

That's evened out between the 80GB and 40GB.

Which means that, if true, Sony is losing their ass on every 40GB sold.