I remember that Sony's CFO made that claim ( CFY profitability ) just after PS3 release.

It was made quite clear that Sony is aiming for profitability against marketshare for their game division this year:

Oneda:"[...] And your third question is the PS3 quantity this year. I mean, the '07 we sold about 9.260 million units and this year we are expecting about 10 million units. So the increase is not so bigger than probably you might expected; that is the following reasons. One is the fiscal year '07; the most important thing for Sony Group is to establish the platform for PS3.

The minimum, I mean, at least over 10 million units has to be sold to create a platform. So therefore fiscal '07 even though that our cost of the hardware is much higher than the price itself, we have to sell close to the 10 million sets in fiscal year '07, but this year, our strategy is that we should focus more Internet-related service operation to increase the... to increase the internet operation, to increase the software rather than drastically increase the quantity by adjusting the prices. If you consider the long life, long lasting lifetime of the PS3, this year we don't think it is a time to aggressively sell the hardware quantity this year. That's our strategy for this fiscal year."

One surprising fact ( for me ) about PS3 that I recently discover was that part of R&D cost of PS3 was absorbed by Sony Electronic Division. So itwasn't only PS2 and PSP that covered PS3 losses ...

I wonder how much really cost the whole PS3 project. 

I estimated the PS3 losses in a previous thread, though that was closed :(

Anyway, I did take into account lower PS2 sales, but slightly increased PSP sales.
Along with projected PS3 software and hardware sales.

I used a $150 loss per unit for the PS3 hardware to arrive at the small profit/small loss scenario.

To everybody, don't suddenly go knocking the $150 loss on the PS3 - that is how I have the numbers, like it or not.

If I am close in my prediction, then the numbers, while not EXACTLY CORRECT, is working for my purposes.

You can see my previous work and underlying assumptions in this closed thread:
http://www.vgchartz.com/forum/thread.php?id=30468

Actually Q4 (ending Mar 2008)

Game Division Revenue = 4.029 Billion

LOSS = 280 Million

With Hardware at (PS2 = 2.35M), (PSP = 3.41M) and (PS3 = 2.32M)

With Software at (PS2 = 24.0M), (PSP = 14.7M) and (PS3 = 16.9M)

FYI

Well, the PSP has also seen quite a boost in Japan.

so when do the numbers come

i think mid to end of july 2008

How many MMO's does Sony have running right now? I can think of three off the top of my head. And with SOE becoming part of the gaming division I think it is very possible that they could record a healthy profit. If between those three MMOs they have 1.5 million people, $15 per month, 3 months, is $67.5 million and that might be a bit low since the original Everquest is still supposed to be fairly popular. With smaller losses on ps3 hardware and a strong quarter for the psp in Japan (or did monster hunter ship at the end of last fiscal year?) certainly helps with profits, even with declining ps2 sales. Then, as mentioned, big sales from games like GTA and MGS.

edit: after looking at SOE's website it seems they have several MMOs out like Pirates, though I don't know how popular it is.  My three above were Everquest 1/2 and StarWars.  They also have Vanguard which supposedly did bad but is still running.

@cwbys21

I guess when you are making predictions you have to break it down in smaller chunks, so its easier to see if the predictions make sense.

For example:

PS2 hardware and software = ??? profit
PSP hardware and software = ??? profit
PS3 hardware and software = ??? profit or loss
MMOs?? = profit or loss

Then add it all up to see if your projection for the game division = profit or loss

that way, you have some back up when you have an opinion.

well i think it is easy to come to the conclusion that ps2 and psp stuff is profit, the MMOs except for Pirates and Vanguard is easily a profit, but I dont know anything about those two to make a conclusion. With recent success of ps3 software (since reports from last fiscal year when microsoft was bragging up their 7 attach ratio verses the wii's and ps3's 3 attach ratio, sony and nintendo have raised their ratio's into the 4s and microsofts has dropped into the 6s according to our numbers) software should be a profit, it is just how much have they reduced the loss on ps3 hardware and by now all ps3's should be using the smaller cell so I think it is quite possible for sony to post a profit.

so to break that down from a big block:
psp = profit
ps2 = profit (obviously)
MMOs = profit
ps3 software = profit
ps3 hardware = loss.

quick thought before I go after writing all that, Sony has been advertising a lot lately, so that may impact things.

@cwbys21

So based on your analysis, then if the Game Division loses money, then PS3 hardware is basically responsible for all those losses - as it is the only part of the game division that is losing money.

This is basically a point I tried to make previously in different threads. For this coming quarterly report, if Games Division still loses money, I attribute it to the PS3 hardware still losing about $150 on average (that is including all costs, not just component costs)