Wrong, that article you posted was in 2005...

try googling something like this: http://www.neogaf.com/forum/showthread.php?t=111003 and why are we talking about Microsoft?

We also have to recognize who Dave Perry is. He's a washed up old developer who's bet his livelihood on flash-based browser-based casual games. He clearly has an agenda, which is to convince people (including investors in his company) that the old style of gaming (home console boxes) is antiquated and obsolete. He's not saying this crap out of the kindness of his heart. It's all a self-motivated smear campaign (aimed not just at Sony BTW).

your article is dated in 2005...the original xbox cost MS 4 Billion...RROD cost another billion...and selling console under manufacturing costs cost them another billion

You had better loan your rose colored glasses to the International Business Community which does not share your confidence in Sony's profitabilty or prospects.

For example  The International Business Times July 29,2008

http://www.ibtimes.com/articles/20080729/sony-profit-plunges-from-year-earlier.htm

Sony profit plunges 50 pct from year ago

TOKYO - Sony Corp. said Tuesday its April-June profit plunged to 34.98 billion yen ($326.9 million)--about half that recorded a year ago--as a strong yen, the absence of "Spider-Man 3" revenue and faltering results at its cell phone operations battered earnings. Bottom of Form

The Japanese electronics and entertainment company, which makes the Walkman player and the PlayStation 3 game machine, had recorded 66.46 billion yen in profit for the fiscal first quarter the previous year.

Price competition in its core electronics sector also led to Sony's worse-than-expected quarterly performance. Analysts surveyed by Thomson Financial had forecast a 52 billion yen ($486 million) profit.

Sony also lowered its full year profit forecast Tuesday to 240 billion yen ($2.24 billion) from an earlier 290 billion yen ($2.71 billion), blaming expected poor results at its Sony Ericsson mobile joint venture and a pessimistic outlook in electronics.

In Other Words the Game Division is doing better than most of their other divisions and we all know "how well" that's doing. Sony could actually be in fairly serious trouble.

Could you provide a link showing these profit margins?

Where in the article does it say that the game division is doing better than most others? It doesn't. The game division is doing terribly. They only posted a $51 million profit last quarter and that was with the release of MGS4, GTA, and GT5:P. It was the other parts of Sony that pulled in the other $275million. This quarter they'll probably lose money in the gaming division w/out any major software releases except Madden and maybe Star Wars. However, last quarter's results are promising in the sense that the games division is on the right track. Without a doubt, the holiday season will see a huge profit. And it does appear that the division is on track for meeting Kaz Hirai's goal of making the PS3 profitable by March '09. Once the PS3 reaches that point, the games division will start bringing in serious money and will help prop up Sony as a whole.

People have been predicting doom and gloom for Sony for ages. In the PS1 and PS2 era, Sony survived largely b/c of the game division. During the launch of the PS3 when the division was bleeding rivers of money, Sony was still very profitable b/c of its TV division. Pretty soon the game division will start taking up the slack again. Sony's diverse products means it's going to be around for a long time coming.

I haven't been following Sony's reports since I've sold all my shares ages ago, but I'm pretty sure that their Movies, Camera, and Television (mostly LCD) are doing better than the gaming division. I only base this off of commentary on Sony on bloomberg TV/cnbc.

http://www.reuters.com/article/technologyNews/idUSN2424903320080125 Talking about profits... 16 billion Dollar / year for MS

http://www.iht.com/articles/2007/10/25/bloomberg/bxmsft.php

 http://www.reuters.com/article/businessNews/idUSWNAB119520080717 (read the whole article, not just the title and judge afterwards)

how/why did Microsoft end up in this discussion anyway?

Certainly, and I apologize for not doing so sooner. I won't be able to give you all the sources, since many of them are in print or were read by me quite a while ago, but here's one from last year that I scrounged up fairly quickly.

http://seattlepi.nwsource.com/business/309852_software02.html

Here's a sample for Q2 2008 (Q1 was good, and obviously, the full-year report isn't complete, and won't be until April 2009).

http://www.dailyherald.com/story/?id=179255

Other recent reports have been fairly negative. The Wall Street Journal and my local paper, the Mercury News, routinely post pessimistic stories about Microsoft's outlook (although the latter is a Silicon Valley paper, so some bias towards the locals should be expected). There are others that I can scrounge up, if given more time.

Again though, I want to reiterate that Microsoft isn't going down anytime soon. However, they are slipping from their high, and there's investor pressure on them to find their focus again. How Microsoft will respond remains to be seen, but I think the Yahoo! situation is a strong indicator: right now Balmer prefers to buy their way into a market, rather than start from the grass roots and grow from there. But I'm getting off-topic here, so...enjoy the links?