Summary:
- Ninty is making around $1bn/year profit (average)
- MS has lost an absolute shitload breaking into the industry
- when you factor in '95/'94 (Sony R&D for PS1), overall they are around break even point - or up $1-1.5bn. As a company, Sony may well be considerably better off if they never entered the industry in the first place.

The last two years have been (by far) the best profits ever for Nintendo.

This coming year for Sony will be a bad one - be interesting to compare overall vrs SCEE.

Yeah, it will be tough on them. Diminishing ps2 revenues will be a major challenge.

In a long run PS3 will make sh1t load of money to Sony. Why? Well Blu Ray, Last time they didn't get much money from DVD sales, but with Blue ray it is different story. Not only this gen but when next gen both MS and Nintendo adopt Bluray in next gen systems( you know they will) they will pay licence fee to Sony for every disk/game sold.
Cell tech will be used in next PS, so even if it looks bad in a long run it is smart move. Just like in poker, long run is what counts.
Props to Nintendo, they know how to make money and stay in biz.
Ms? Well someone has to much money...

Sony isn't the only company that gets licencing fess from Blu-ray. And Nintendo will make its own format, like it did for the GameCube and Wii.

Can someone tell me how come Sony didn't make more money on PS2?
So many systems sold not to mention software....it's strange really

 Yes i know, but Sony takes biggest cut, i think it was 25%.

Ninendo will adopt Blu ray, but it is complicated to explain and don't have time to write about it now.

The PS2 was also sold for a loss, (just like the PS3 now), and they only fixed it with huge software sales. (unlike now).

Assumption #1: Blu-ray will win the format war against DD (unlikely)

Assumption  #2: Nintendo will follow the "HD trend" of the two losing consoles, while they are winning big with making simple, cheap hardware and software.

Assumption #3: Hardware superiority makes a console win.

Impressive. This isn't anything we didn't already know but it's fascinating to see it presented in such a way. Nintendo despite it's disappointing sales on N64 and GC is clearly the one company that knows how to succeed in this industry. Sega/Sony/MS may have stolen some of the wind out of their sails but Nintendo's boat has yet to hit any rocks.

PS3 is as much a financial disaster as the original Xbox (but maybe it can still turn around). Sony would have been infinitely better off if they'd just stuck to the PS2 and kept putting out AAA games for that instead. Could you imagine? With the combined base of PS2/Wii few developers would bother with 360 and it's pricey development and puny userbase.

Intersting to note MS lost more money 2007 than Sony.