Wrong, sonys making a profit right now for the first time and they arent even 2 years in. Even after then lost 500 dollars a system initially. They will make a profit when all the smoke clears

You're missing the point, Alby Wolf: I don't believe anyone is arguing that the 360 is the only console that benefits from cost reductions or software sales. They all will, eventually.

But for Microsoft, those cost reductions are already here. They are already making a profit on the hardware itself, and thus can afford to drop the price without dipping significantly into losses. For Sony, profitability has not yet been achieved on hardware (last estimate given was at the end of FY 08, ending March 31. Sony estimated ~130 dollars lost per console produced).

When Sony achieves profitability -- and they will, because, as you said, all consoles see cost reductions -- then they will be ready to discuss price cuts. But they are not there yet. Microsoft is. So at this exact moment in time, Microsoft can afford to cut prices, while Sony cannot.

Well, put this way is clearer and more equilibrated than the smbu2000's phrase I answered.

But, Sony could always make a gamble on its future HW and SW sales and anticipate a price cut, if really necessary and worth it. Obviously, if they manage to keep even a measly lead in WW weekly sales on XB360, I agree with you that they won't cut prices before cost reductions make it possible without huge losses.

Anyway, based on analogous past troubles for XBox 1, we can estimate that to break even, accounting for royalties too, a console costly as Sony's and MS' ones must sell anywhere between 35 and 50 millions, with Sony, due to bigger initial losses this time, having to sell EARNING some million consoles more than MS to achieve this goal, although MS accounting for most losses it legally can in a separate report item is muddying a little bit the waters on this matter.

 Which is why PS3 went from selling 50k a month in the U.S to selling 150-200k a month.

Which is why PS3 went from selling under 100k world wide A MONTH, to 500-700K a month world wide.

And thats just the 40gb being $399

edit: If sony bring out the 80gb ps3 again, they can still outsell the 360 in that region.

If you need somone to point out to you why PS3 and 360 don't directly compete with the Wii just look at the multiplats. Wii shares 10X more games with gamecube and PS2 then it ever will with the PS360.

Lets. Be. Real.

Component reduction: It's true that reducing size and amount of items in the console will make a cheaper overall cost to produce the PS3. However doing this requires an investment in both time and money, they need working models, time to test etc. This all requires money and costs short term which is why we don't see reductions in chip sizes in the PS3/360/Wii every other week.

299/399 Price point: It would work to sell the item(hopefully) however Sony has a responsibility to it's share holders to show profit in as short a time as possible. If they take a loss leader and show no signs of profitability in a reasonable amount of time(considering PS3 is out nearing it's 2nd year.) share holders may drop the organization which is actually a lot worse. Chances are a 299$ PS3 right this second may hurt Microsoft but it would also gravely hurt Sony and their image to investors.

Edit: As far as the ring of light being fully lit up with green bars, that has to do with amount of active controllers

Right, there are definitely times where it's better to take a loss now and hope to make it back later.

The problem is that Sony has already done that. Twice. The original price of the system was already a gamble, selling at 200 dollars below production value; then the first price cut to 399/499 pushed those costs even further. You want them to do it again? Well.... anything is possible, but at some point, every product needs to stand on its own two feet, and apparently Sony agrees that the PS3 has reached the point where it needs to do that.

Nicely put in both of your posts Bodhesatva.

How can it have won a generation it wasn't even a part of?

If you're saying it won two because it surpassed the lifetime sales of a sixth-generation console, then it isn't the first to do that either. That would be the PS1 the moment it surpassed the lifetime sales of the SNES.

We don't even know that MS is making a profit on the hardware considering that there are many other products in their E&G division, not just the 360.

I'd be willing to bet that MS might even still be losing money on the hardware considering that even with 360 games, Xbox Live, 360 accessories, Games For Windows, mice, keyboards, game controllers, mobile software, and the Zune, its music store, and all the accessories, their quarterly profit was all of $89 million. Something must have been dragging their profits down, and I can't imagine what it was...........