The N64 was very profitable.

Not entirely true.  Some third party support, such as Ready at Dawn which made God of War: Chains of Olympus, has completely stopped developing for some Sony platforms.

Because the PS3 and 360 are approximately as powerful as each other and have approximately the same type of installed base right now, it generally makes sense to make the games cross platform, even if it wouldn't otherwise be profitable making a game for the PS3.  Porting is still relatively inexpensive.

LOL cant take the rest seriously with that bs.

Theres no comparison. The N64 was profitable and the distance between it and the leading console was nowhere near as great as the distance between the PS3 and Wii. Furthermore Nintendo games sell a crapload without requiring a massive investment in time and money whereas PS3 1st party games are all lining up at the top end of this generations budget rankings. Sure the games ARE great, and they make perfect sense from a gamers perspective, just not so much sense from a business perspective.

The distance isn't as big as of YET.

But as it stands, again the PS3 is not the N64. If anything maybe you could argue that it is more like the Saturn during the PS1/N64 era, but even then things get complicated.

I just look at it as a new gen and leave it at that, similarities will sometimes be apparent and comparison's welcomed, but no two gens will be exaclty alike.

I'll rephrase what TheBigFatJ said for you

"Because there isn't enough of a difference between the PS3 and XBox 360 to port games from one system to another with enough of a difference for anyone to care about"

Sony emulated a few of the greater failures in the past and invented some new ones.

From the Xbox 1:

• Expensive hardware, that doesn't scale lower in cost fast enough.
• Extra performance at an extra high cost which doesn't improve the games significantly, actually they did one better on this as the differences are subjective and not definative.

From the Saturn:

• They made it difficult to extract performance out of the system, two Core types is probably about equivelent to having two seperate CPUs.

Unique to themselves:

• Delayed their best system sellers to the point where they didn't matter anymore (Killzone 2) or to the point that when they are released they cannot change the course of the generation by themselves (GT5)

I dunno if you can make that comparison stick, I mean the PS3 has gone down in mfg. cost quite dramatically.  Sure, it hurts to not be even lower, but that's more an issue of high initial mfg. cost rather than not improving the mfg. cost IMO. 

Also, those are more like mid-level historical failures, or mid-high at best.  For instance, a Saturn mistake not repeated was the launch disaster.  Even "599 US dollars, get another job" is hardly a blip on the radar in comparison to that fuckup. 

I was thinking from the perspective that the console recieved massive cuts early in its life and losing money on hardware is accepted as an ever present phenomenom. Obviously in terms of cost scaling one is better and yet there are some features like the HDD which will keep the cost of the machine higher relative to a simpler competitor.

Yeah. The n64 was in huge disadvantage. The ps3 will do better, way better

If you're saying that you meant something like "expensive hardware that is sold at a loss for a very long time" then I would have to completely agree.  OTOH, the HDD is a minor cost that's actually cheaper for Sony than for MS (due to MS's big custom cage) ... unless you were comparing to the Wii this time.