M$ has generated these sort of sales using hollywood blockbuster level marketing campaign running into millions of dollars. Sony does not have the money nor the resources to match them.

Yet at the same time games like Uncharted, Ratchet and Clank and even Heavenly Sword have shown steady legs just by the virtue of being great games and word of mouth. I am sure the same is going to happen with Resistance 2 and LBP.

Once again I can understand if someone puts forward the logic of price and marketing being the factor for the PS3's troubles but it just rankles when ignorant people put forward the beaten-to-death argument of lack of games on the platform.

That's not true, sunk costs say hello.   That's why MS is ecstatic now that the X360 is making a profit, even though they lost much more money on their gaming division than Sony ever did.

@Kyros: Oh, so it seems. How did i recall Sony selling its production to Samsung. Well, anyway, Samsung is the majority owner in the joint venture.

@ocnkng: The article is talking about system sellers. It mentions Halo 3 and Gears of War because the two titles were ones. So far PS3 has been lacking system sellers. PS3 is too expensive for the Singstar/Buzz audience, in multiplatform titles 360 has the advantage due to its price and there has been very few core titles from established franchises as exclusives that have had the potential to sell systems for the current price. I believe the biggest ones so far have been MGS4 and Everybodys Golf.
Sony has really been pushing the PS3 marketing, so the lack of marketing is hardly the reason for SW (especially potential system sellers) and HW performing badly.

@senseinobaka: Sony does have new console and new handheld in R&D (and "improvements" to existing ones). I doubt they are going to give up. Sony wants to get back its investments, so they propably reuse as much as possible for PS4 from PS3 and next gen Sony will have a lot better strategy than this gen.

$4.23 billion in losses as of June 30th, 2008 and growing.

That is a debt that is highly unlikely to be recouped in this generation.

You can't really compare MS and Sony directly. Microsoft is an extremely profitable company, not only by absolute numbers but also by profit margins. 20-30% as opposed to Sony's 1-5% margins (tending more to 1% lately).

Sunking oodles of cash is fine if your company is not in risk, but that has never been the case with Sony. For years Sony's CEO has been pledging to raise Sony's profit margins because of that. Maybe MS shareholders aren't too happy with the Xbox's past, but Sony's shareholders have much more reason to worry.

One thing which definitely makes past costs important is the decision to continue or not in a market. I'm not calling it either way, but you can bet that SCE's low total profit makes it harder to justify the development of a PS4 and PSP2. Especially when competing a company full of cash like MS.

 According to the OP, its decreasing..

How can it be growing if sony recorded profit last quarter? And likely will this quarter?

IMO PS3 could become the hugest financial flop in the history of VG industry.

The economy and exchange rate got worse.

Why will they likely have a profit this quarter? Are you paying any attention to PS2 sales and the dollar/euro which make up the bulk of SCE's revenue?

I think last known quarter SCE made a loss that erased the little profit they made the first quarter ( of the FY ).