who said theyd give up on PS3? was it some sort of idiot

The funny thing about holiday quarters is this... Sales are huge, therefore revenue is huge. If you're making a profit on your sales, this means holiday quarters are of course more profitable than other quarters. If, however, your profit margins reverse into loss margins (as it seems to be the case), the opposite happens.

Of course fixed costs (such as salaries) are also part of the equation. The more the revenue, the less relevant these are.

It is not obvious to me (from the information I've seen) that manufacturing costs are the most significant cause of forex loses.

Manufacturing in the semiconductor industry is ruinously capital intensive. This why IBM formed it's formed it's coalition of everyone-except-intel super friends, no one of them alone could afford to keep up. Actual "assembly line" labor costs are relatively small.

On the other hand all of their Japanese studios, firmware developers, etc will have had an instantaneous hit to ROI. Also, lets say they have a standard rate of capital depreciation for intellectual property. Since capital was valued in yen and most of their revenue was not valued in yen it would have a deleterious afffect on operating profit.

Sony won't stoop as low as Sega, that's for sure!

Nice analysis. Sony isn't doing that nicely atm, but its not dying and neither is PS3. Anyway theres no indication of PS4 and there might even not be PS4, if sony won't make enough profit/profit at all with PS3.

I don't see PS3 being discontinued.. however, I doubt that third parties will see it as a viable platform with the spectacular failures of Haze and Lair. Sony could get back in the game by releasing some awesome 1st party (GT5 is the only one that comes to mind) and renew interest in the PS3.

its like sony say, theyare in it for the long run! what the rush for a price cut? they should do one when they are good and ready.