To add:

It may make sense for Sony to rely on brand name, and try to "milk" the PS3 (if you can call it that) as much as they can, and squeeze out any profits they can. Because it seems like the brand loyalty is there to be able to do it. (Of course, no company will ever admit that they will do this.)

By milking, I mean that invest/spend only what is necessary to keep up the product and not make it any better than the competition.

In the meantime, they can try to figure out a new product to replace PS3 (whether online, new console, etc) and see if they can regain their "dominant" status ala PS1 and PS2.

Because for either Sony or MSFT, if they don't have that "dominant" product which generates "significant" profitability - then there is not that much economic sense to continually invest money for the possibility of ONLY low or decent returns and not windfall profits.

"okay"

if you notice, ps3's hardware sales from launch virtually equal ps2's first 1 and a half year too.

Aint SCE profitable ?

PS2/PSP/software is covering PS3 hardware costs.

You totally forgot to include PSN profitability, if the information is available. Sony must be making money off that, i know im contributing to it ( just wasted 95 $ in the last week ) Also the New Video Store thats only in the states might be helping in Sales to bring it up. The only problem that i have with sony is that they haven't completely made available PSN cards all over the states, though there are a few in select locations, and they are all over priced on Ebay. If sony just get PSN cards out to the masses, whore out gimmick services like qore ( It's not bad ) it can turn the tide, slightly, on the negative profitability.

@Hus
We are taking into account only the Game Division (as of Mar 2008 - still not profitable)

Here are some previous threads that I made to clarify where some figures came from:

http://www.vgchartz.com/forum/thread.php?id=32610&start=0

http://www.vgchartz.com/forum/thread.php?id=32456&start=100

I like to plug my own threads haha..

@alucard
So far, I've kinda lumped PSN with PS3 (for software). However, if those video downloads take off, I'm sure Sony would be proud to announce it and maybe make separate comments in their financial statements. If that is the case, then I would also separate it out in my future analyses.

Hope that clarifies some of your questions.

what about the other divisions?
if they make good money there , they may use it in the gaming division, right?
and good thread bumidan

I guess they can do that, but not likely.  Other divisions won't be happy if the game division affects their division profits.  Coz generally people get paid better if their divisions are successful.

From where are you getting PS3 shipped numbers?

 From Sony's financial statements - except the one for 3 months ending June 2008 - I guesstimated that to be 2.0 million PS3s.  For the June 2008 quarter, Sony should release the numbers fairly soon.

I think 2.0 million PS3s seem reasonable.  MSFT shipped 1.3 million for the same quarter.

So maybe 1.5 to 2.0 million PS3s - since the PS3 has been selling better for the past few months.