Let's throw some numbers around. GT5 is a first party game that sold 2 million copies at $40 a pop. Let's say the retailers pocket $10 a pop. Therefore the retailers buy each game from Sony for $30 per disc. So Sony pockets $60 million. Ratchet costs $15 and Warhawk will cost maybe $15. For Sony to make $60 million, they would have to sell 2 million copies of Ratchet and 2 million copies of Warhawk expansion. Not gonna happen considering the sales of the full games. The movie service isn't pure profit b/c not all the content is owned by Sony. Even if it were pure profit, at $5 per rental on average, 2 million downloads would only yield $10million. Not much money and most likely there haven't even been 2 million downloads (which is 1 in every 7 owners downloading one flick). The money generated by the movie service, ratchet, and warhawk probably won't even equal what just GT5:P has made for Sony. Think for a second how much they made on the royalties for the 6 million copies of MGS4 and GTAIV. 

Because cheaper does not always mean better, often means that the product is indeed "cheap"ly made. BluRay had way too many companies backing it for HDDVD to compete. This was due mostly to the PS3's install base. Back when DVD was coming to fruition, many people's first DVD player was indeed PS2 as it was a DVD player and a console, multi functionality is the future.

True, but what about manufacuting cost cuts and the fact they switched to the 65nm (or is it 45nm now?) CELL and 65nm RSX? I think just these cuts dropped loses considerably.

Blu-ray had more movie support... the only studios that would of definitly stayed to one side or the other was Sony studios.

Outside of PS3s HD adoption rates have sucked and even with PS3s counted disc adoption is monumentally behind.

Had PS3 not entered the Market the HD "war" wouldn't have even started in earnest yet as nobody would be adopting yet.

The HD fight basically started when Sony said it did... they ended it quick for fear of DVRs VOD and others rather then the longer war they would of won anyway. Whether it benifited them has yet to be seen... and honestly is hard to tell even when the data is in.  Since we won't really know how many extra movies winning the war "early" will sell.

blu ray will make up for it.

Its good to have one lifeboat, but it won't save whole crew or the boat.

having the PS2 still around and the PSP making a profit now will save the boat.

See there is this mistake again.... PS3 is only part of Sony's gaming division. I am sceptical the gaming division will have made back the $3billion it lost by the end of 2010, it's possible, but unlikely. Consider that in the best year of PS2 only (before PSP lost some money) they still didn't manage $1 billion... and you are suggesting they make $3 billion within 2.5 years.


But then, your mistake is to use the word PS3.... the PS3 business alone, has lost well over $3 billion in the past 2 years (probably about $5bil) and has only been propped up by PS2 and PSP. So to say the PS3 alone will make that kind of money in 2.5 years is a very silly prediction indeed.

Because that's the easiest way to defend Sony:  Start ripping on Microsoft.  It's a common tactic around here.

The truth of the matter is that Sony and Microsoft are two very different companies and they do business very differently from each other.  (cue the moronic monopoly jokes about Microsoft)  Microsoft is now making money per console sold.  Sony is not.  Microsoft can now afford a real price cut.  Sony cannot. Microsoft has the money to look at the long term and see the 360 as a machine that gives them some of Sony's former market share.  If they don't have quality issues in the next gen like they did with the 360 at first with the RRoD, they could do even more damage to Sony in the next round of consoles.

What's worse for Sony, like the article says, is that this may force them to keep the PS3 on the market as their main console for a lot longer than they would have (the ten year plan) while the competition is all releasing new machines.  The PS3 is probably pretty capable of keeping up with those machines, but it will be looked at as "old" when the next gen of hardware comes out.

i hope this starts a turn aorund in the industry