I always see forum arguments about whether the PS3 is profitable or not.

I'd like to see a definition of profit, as well as an answer.  Anyone up for it?

The hardware.. no.

Hardware and Software.. yes.0

I think the console is close to being profitable, being that it costs just over $400 to make and is being sold for $399 so given the fact Sony is about to implement the 45nm tech in the console for the CELL and also 60nm tech for the RSX then this should bring down costs dramatically and thus make them some profit, unless they decide to make a price-cut which would likely eat up any profit made by the console right off the bat!

Considering the console was $800+ to produce come launch i think they have come on leaps and bounds to make the console that much cheaper to produce and this will continue into the future until the inevitable PSthree!

You want a definition of profit...?

Considering the rise of the Yen since the last analysis, it's highly unlikely that the PS3 makes a profit at the moment, but that could all change if the Yen drops (and currencies have been fluctuating like made these days, it's quite possible).

They're selling the PS3 at a loss but they're making profit from licensing and selling software so the two combined seem to be profitable.

Well it's simple. Look at the results that Sony is putting out, very small profit.

You have PSP and PS2 that generates money then you have PSN and other software on all plattforms that generates money.

So those numbers of hardware combined with all the software creates so little money then you can figure out that the PS3 is the black sheep.

PSP + PS2 + Software = Profit - PS3

In short, they still lose money on PS3 hardware. Maybe they will turn it around later 2009 but the decline in PSP and PS2 hardware and software will make the profit stay low.

The question is, can the afford a price cut? Can the gamble not to do a cut?

How can they togheter seem to be profitable when everything including hardware and software from PS and PS2 still make so little profit?

yes it is profitable if you include the software... Sony has said that themselves

I just remember this old interview,

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You have spent three billion dollars on the Playstation 3, disregarding research and development. Can you ever get your money back?

Stringer: Not for as long as I live (laughs). It will certainly take some time. The traditional business model for the Playstation envisaged us making a loss with the hardware in the early years until the production costs had decreased to a point that enabled us to break even. In the meantime, we earn money with the games. We are currently at the stage in which we need to get a grip on the production costs. That takes time. We are already making more money with the games than we are losing with the hardware.

http://www.welt.de/english-news/article2358382/Future-of-Sony-Ericsson-uncertain.html
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That's also the quote cited above about how it's earning more on software than losing on HW.  Question: Is it fair to disregard R&D? Did Sony spend a lot on developing PS3?