One thing I don't understand... If PS3 sold like it was posessed and sold lots more consoles and software...like the Wii for example... Looking at these numbers, sony still wouldn't be making that much money. I mean, PS3 isn't selling terrible by any means.

So seems like the best case scenario for the PS3 would have been to break even for the first 3 years on the market. Doesn't look like a good business plan to me...

Yeah Sony made the PS3 knowing it would not make money for a long time even if it sold like the Wii, in fact if it sold like the Wii they would be in huge debt thanks to losing $100 on each console sold.

Makes no sense to me but obviously did to Sony, I think it just shows Sony are really in for the long haul with this one.

The ps3 was suppose to sell like hot cakes. That was what sony plan even with the lost on the hardware. The software was suppose to sell like crazy to to make up the different as with a higher userbase for the ps3 comes higher software purchase. That hasnt happen the plan to sell like crazy didnt come through and software sales are not as high as expected. Right now to cut losses sony has to lay left and right to keep running properly and appease shareholders.

Hence why I call the PS3 the "living sacrifice" for Blu Ray.

It does make you wonder whether Sony will take a risk with a 4th playstation, and if they do, just how different the console will be...

^ Yup that as well. Sony other plan was to use the PS3 as a trojan horse for blu ray. Basically everything going way out of plan and sony right now is doing there best to stop the bleeding.

Yeah, it's the loss leader strategy, or razors/blades. It's a win or die kind of strategy that is incredibly risky for this very reason.

The idea is to sell hardware at a loss, to insure that the product is inside people's homes. And then when everybody has one, they go out and buy games, accessories, movies ect, and you profit on that. But unfortunately it hasn't caught on, software isn't selling as much as they would hope due to competition, blu-ray is still seen as luxury rather than necessity, ect ect ect. It's the kind of strategy where you have to win to profit, and if you don't win you lose big. It worked for the PS2 which had the same strategy, and I think the PS1 as well. But during those generations Sony was cleaning house.

Nintendo goes with a completely different strategy, they are a far more conservative company. So even during bad times they make a small profit, and it good times they become the second most valuable company in Japan.

 Sony never expected the PS3 to sell like "hot cakes". They expected to launch at a loss to bring Blu Ray into millions of homes while their videogame system's name took a nose dive. In otherwords, "suicide mission". :)

Blu-ray worked out in terms of it winning the format war and being adopted by the huge film companies and the PS3 had a big role to play in that. Sales for the console though were not what was expected but Sony have to learn from this as does any business.

I dont think a PS4 will or has to be a graphical leap in terms of tech which the PS3 was. A modified blu-ray player and a more powerful cell processor is the safe and smart option. For one devs will know how to program for it and secondly it will not be £425.

Don't forget sony favorite saying "sell 6 million console alone without games, and peop will even get a second job to get a ps3."  I'll never forget that saying.