For the same reasons nobody else does it with their blockbusters: The encoding quality is improving as time goes on, and the userbase is still small. So if you throw your big titles on the market now, and if you do it with good quality, then you probably will make back your investment and a little more. But the "source is out" and the (serious) pirates will follow suit and pirated copies will ruin your business with that blockbuster forever.

LOL.

You fail at teh maths.

 I think that was one of the smart decitions they made.....

I think what you're suggesting is that because the production costs were in previous years, they aren't relivent because the console is generating a small profit now? That's bullshit. 

Companies evaluate projects (ps3) on their initial costs (~3 bill loss) and their expected cash flows over the life of the project (hard to say if PS3 has generated any cash flow cause sony doesn't report it seperately). It might have been 3 fiscal years ago, but it's not like they are ignoring that amount and just looking forward to profits now.

XBox 1 ended so bad because it lost for 2 years on a total life cycle of 3 1/2 years, losing money for two years, even less probably, on a total life cycle of at least 7 years, should put PS3 on a safer position, and games are already selling well, despite the still small HW base, so royalties are already helping now, they should even more in the future.

And let's not forget that MS accounts for the most losses it legally can in a special separate report item to make operative divisions different from its traditional cash cows look better (you can read it directly on their site somewhere, their reports are public), so the current XB360's situation, despite far from not being satisfying, is less rosy than it looks, and this is good for Sony, as now it can't even dream of competing with Nintendo, so it should concentrate on catching MS ASAP.

Dont worry, Sony will just suck the life out of some more musicians' music to recoup ;)

In seriousness tho, didn't Sony sell off their Cell manufacturing plant to Toshiba and gain a ton of money on the deal? I imagined that that gain would offset losses from PS3 production.

Who cares. True gamers only care about games. Op Grow up be a Gamer not a stirrer.

Only people who care about losses on consoles is Sales executives of a company.

Yes YES!! YOU UNDERSTAND! Really tho, shareholders care. And shareholders' money is what makes the console that true gamers love.

LOL! But I'd say, instead, that they'll suck the life out of teenagers' parents selling even more crappy music to their spoiled sons! 

Ah, you might just be right about that. PS3 investment losses?  50 Cent got it covered!