^^^ Yes. I just misread his post. Sorry.

Blah blah blah round and round the spin goes. This isn't your first post here, your undeletable posting history tells the whole story. Anyone interested can go look there.

Last I caught you, you were double-teaming with another buddy trying to convince people the ps3 was sold at a profit while the xbox wasn't, and if recall the warnings we got last week it does appear SCE's trend of posting losses won't go away soon (30 billion yen [330 million dollars] of losses during the busiest quarter of the year).

So... MS sold a zillion more consoles, and a zillion more software units this holiday season, compared to last year, yet... their entertainment division actually dropped hundreds of millions in profits...  The dollar has weakened considerably since last year, didn't it?... hmm.. would that have an effect also (should have upped their profits considerably), given the large gains for MS in Europe and Japan?

Unless they are spending a truckload on R&D, where do you suppose that money went?  Particularly all the additional software profits?  Something had to eat it... what could it be?  Hmm... what could it be?

Sony's change is a considerably more positive trend.  PS3s may very well sell at a profit -- not what the Pro or Elite models do, but a small profit nonetheless.  Probably a lot more than the Arcade, which, if you actually read my posts, you'll note is my reference for comparisons.  A significant portion of Sony's losses can be attributed to the recent rise of the Yen, which may have turned the tables on hardware profits in the last quarter, as well.  Even a minor amount of R&D could be the reason Sony is posting a loss, given minor profits from hardware, although I will confess that the PS3's software should have held the line if the hardware was breaking even -- even the Yen's rise shouldn't have washed it all away.

On top of all that, MS updated their hardware to be cheaper (Jasper) in the last quarter, and they still cut their profits nearly in half from the year before, despite colossal increases in software sales.  Then they went and axed 5000 employees -- 1400 immediately from the entertainment division... and Sony didn't.   Could it be that, they know the Arcade is going to cost them for at least the next year, at its rock-bottom $199.99 pricetag, and they wanted to mitigate that as much as possible in the short-term, so as to not hit red next quarter, given the much lower software sales of the current quarter?

So are you going to stand up and take my bet, or not?  MS will not drop the price on the Arcade SKU in 2009.  They may up the "value" of the package (although I doubt that too, actually -- that's something better done on the Pro, IMO).

Oh gosh you are thick. Last year was Halo year, you know the best-selling game for the 360? First party, developed and published by Microsoft so they were getting the lion's share of the sale instead of just royalties? Halo 2 was the only profitable quarter for the original xbox, a console that accumulated 4 billions (at least) of losses during it's run. Of course they made more money last year, they sold millions and millions of Halo 3's. Nevermind the fact the xbox wing is folded into the EDD. Who knows, maybe the 54% drop in Zune revenue (which they mentioned on their report) might have hurt some.

Anyways, the important point is: you were working hard to convince everyone here that the ps3 was being sold at a profit, in the meanwhile Sony lost around 330 million dollars in the quarter where the most software is sold (and software is royalties for Sony).

Of course the Yen hurt them, according to Sony financials around 50% of that loss comes from fluctuating currency.

So Sony, let me repeat that, lost 160 million dollars the quarter during the which their revenue from software royalties is at its highest. Not to mention all the profit from the ps2 and psp units has been eaten up. So only two choices remain, either Sony Computer is an extremely poorly run business or each ps3 sold is costing them money.

As I said, nevermind the facts ruining a good troll, so you can keep working hard in a desperate attempt to make-believe people the ps3 is a profitable venture. Well, it's not. There's a reason the guy responsible for the whole thing got "eased out", AKA sacked. Now let's just hope poor 'ol krazy ken doesn't get ran over like Yokoi, another famous "eased out" high-level manager of a japanese videogame corporation.

@Groucho: Actually they are indeed spending a lot on R&D, for Windows Mobile specifically. See this thread:

http://www.vgchartz.com/forum/thread.php?id=58069

106 million dollars, wasn't it? a 29% increase they quoted. Does this mean their R+D budget at the division is now around 400 million dollars? Woah, those Surfaces sure are expensive.

No, more than that:

Research and development expenses increased $251 million or 37%, primarily reflecting increased headcount-related expenses associated with the Windows Mobile device platform, driven by recent acquisitions.

So in other words it went from $678m to $929m (total R&D spending at the division).

EDIT - Oh wait, this is for a 6 month period. For the 3 month period it increased from $365m to $471m.

That's over a billion dollars in R+D per year just in the EDD division. What are they cooking there?

^^
XB720 should already be in development, at least in its early stages.

Instead of dropping by $100 at once, Sony could do it in two steps, forcing MS to choose between reacting only once or firing two of its last price drop cartridges.