It's been an interesting Generation so far. Nintendo is back on top and Sony is struggling to get their act together. However, the most fascinating company thus far for me has to be Microsoft.

They made a great choice by releasing their console first, but barely took advantage of it in the first year.  It was really hard to find a 360 early on because MS sent out so few to retail. Then came problems with the hardware which they avoided until they had to admit was failing at an alarming rate.

However, one thing was clear throughout, they were there to compete, and they were not going to forfeit easily even if it cost them. Is it worth it?

Oh yes, with the recent price coming in September, MS has assured their fans that this war is not over yet and they will do anything to maintain or even increase their lead on Sony no matter the cost. The problem for Sony is that they can't compete with MS money wise, and with so many losses already they can't afford to compete this way.

Does being 2nd worth the cost of revenue or is bragging right that valuable?

Sony needs to show people that the ps3 is ahead of the 360, and then they will get sales, people dont believe it is.

 How does Sony show that when the numbers say otherwise.

 Im not talking about life to date sales, Im talking about hardware performance.

of course it is worth it, everyone hates to be last, but i don't think sony is out of getting second yet.

Well, they need games, tons of them. So far, we have many trailers.

Ultimately it's a business. If there's no money in being second then it's simply not worth it. Although both companies have secondary agenda's - Sony to push Blu-ray and MS to keep Sony from owning the world's livingrooms.

So far in this gen coming second has come at the expense of billions of dollars. MS is at least starting to recoop initial loses, but Sony is still just losing money. If either of them will come out ahead by the time this generation is finished is still open for debate.

On the flipside Nintendo was very profitable in 3rd last gen.

Right now it means one thing: showing that the PS3 is better than the 360. (in other words, showing that Sony is still beter than MS)
Beating microsoft will REALLY matter next gen, as it may beat them out of the market.

Who made the profit last quarter? Who is cutting their prices in a couple weeks? I think Sony is doing a much better job of recooping losses.

Nintendo was very profitable because they owned the handheld market, gamecube was a small contributer.

Its better than 3:rd place so guess so.