Until we get fact, these rumors are just rumors but still leaving a large mystery mass of hemoraging money that non-believers can't account for. Do you suggest its Ted from accounting leaving the water faucet in the 14th floor bathroom running that is draining Sony money and not the PS3s production cost vs sales cost margine?

Sony cut cost on PS3 Europe by cutting reverse compatibility and they then charge more for it there than anywhere else, so yeah, I imagine it more profitable there, hahaha. However PS3 Japan is selling at a considerable price cut already and the states lie in middle. Unless you are using Europe as model for your theory for the PS3 making profit and expect us all to get same gimped version eventually, you have no argument. How long did it take for price cut in PS2? PS1?

I dont know how many exactly has Nintendo but Sony sure has a lot .Guerrilla ,Team Ico ,London Studio ,Santa Monica ,SOE ,Polyphony ,Insomniac ,Incognito ,Evolution ,Naughty Dog ,Zipper ,Liverpool Studio ,Media Molecule ,Factor 5 ,etc etc .Phil harrison said back in September that they had some 100 development teams all over the world .I doubt Nintendo has that much ,especially looking at their software production .

If they have so many teams, why so few games?

Uh where did you get this number? Because last time I checked the PS3 is over 1.5 million in North America while stand alone Blu Ray players are just under 100k so the PS3 is selling a lot better than Blu-Ray amigo.

Also intersting fact: stand alone HD DVD players are over 100k while the 360 HD DVD player is at like 200 k meaning it's selling better than the stand alone players. 

Nintendo has: EAD, Intelligent systems, Monolith, Sora, Gamefreak, The Tetris Company, Nintendo R&D1, brownie brown, NDCube, EAD Tokio, NST, Retro studios, R&D2, AlphaDream, Ambrella, Clever Trick, Fuse Games, Genius Sonority, HAL, Nexon, Noise, Param, Saru Brunei and Skip ltd.

Nintendo could just go out and buy another 100 studios, but these guys all make relatively good games(EAD, Intelligent Systems FTW).

And, ofcourse, Miyamoto alone could count for 500-600 studios if you look at creativity;)

Just to point out the blu-ray diode in all blu-ray players dropped from $125 to like $8 each. Also they did remove the EE+GS and 32mb of ram from all PS3s in production. That lowered production costs a good $75. The Cell and RSX are now 65nm so that cut about $75 off of them. Plus overall hardware shrinkage due to removal and all that had to lower costs roughly $30. Im thinking the price drop will be anywhere from $50 - $100 with a slim chance of $150 - $200 if they can cut even more costs.

The 125 dollar cost is for the WHOLE blue Ray Drive. The cost reduction is significant though since the Diode went from around 65 or so to 8 dollars.

Only europe removed the EE as far as I know and I haven't heard about the 32 Megs of RAM. The Cell i the PS3 as far as I know is still only 90mm.

Few games?

Let's look at the Sony games in development right now for the PS3 only (1st and 2nd party):

Guerilla is developing Killzone 2

Team Ico is developing an unnamed PSN game to be revealed at TGS or E3.

Sony Santa Monica is early in God of War 3 development.

SOE is making The Agency that should have a big E3 showing.

Polyphony is working on Gran Turismo 5.

Insomniac are making Ratchet and Clank: Tools of Destruction and have stated that they will be working on Resistance Fall of Man 2 after that.

Naughty Dog is making Uncharted: Drake's Fortune and has a Jak and Daxter: Lost Frontier game listed for 2008.

Sony Liverpool Sutudios is making Wipeout HD (downloadable) and the next real Wipeout sequel.

Zipper is making the next real Socom sequel (not the downloadable one).

Slant Six Games is making Socom Confrontation (Downloadable MP game).

Factor 5 is almost done with Lair.

Sony Japan is gonna release Folklore in the US and Europe this year and is finishing Hot Shots Golf 5 and is probably going to show the PS3 Locoroco soon.

Quantic Dream is making Heavy Rain.

Ninja Theory is almost done with Heavenly Sword.

Sony London Studios is working on The Getaway and the PS3 Singstar.

Sony San Diego is making NBA 08.

Incognito is finishing up Warhawk and is reportedly working on a Twisted Metal next gen game.

SCE also finishing Eye of Judgment.

SCEA making High Velocity Bowling.

Media Molecule is making LittleBigPlanet.

Level 5 is making White Knight Story.

Sucker Punch Productions has an unnamed project in the works (maybe Sly Cooper 4).

(Edit) forgot to mention the following games: Eight Days (SCEA) and Eyedentify (SCE) that haven't been shown in a while and should have new info on them E3 or TGS.

That's 22 Groups working on 31 PS3 exclusive 1st and 2nd party games off the top of my head. I'm sure there are others that haven't been revealed yet or that I forgot to mention.

+1 ckmlb,