Yes M$ is profitable now, however they still need to make up all the money they lost as well.  But again, my point is that they are well on their way to doing exactly that.  With another $100 price cut, Sony will still be taking huge losses, and will never be profitable with the PS3.

Another point, most of M$'s losses are due to the original xbox and not the 360 so to be honest that shouldn't even be compared.  Just like all of the profits for the PS2 shouldn't be added to the PS3.

"for the period beginning in 2005" excludes the money-hemorrhaging of the original Xbox quite nicely.

And I think most of us can agree that there won't be a $100 price cut before next fall at earliest. $50 soonish is what many are saying.

The EDD(360) has lost 3.5 billion since 2005.

I am starting to agree with the op.  Sony has the ability to grow the gaming division into a healthy and profitable business.  They are losing market-share to MS, and I don't even think they consider Nintendo any more.  Nobody's catching them.  To some extent I think they learned a lesson from Microsoft's recent price drops.  Those drops haven't helped MS close ground with Nintendo, if fact it has little to no impact there.  Sure Microsoft was able to increase marketshare in relation to Sony, but they have hurt their profitability.  The EDD made 134 million on 1.8 billion invested the last quarter before the pricecut, and they made 112 million on 3.1 billion invested in the first quarter post pricecut.  Essentially, MS went from earning 7% on invested capital to earning 3%.  This is a division that also benefits from retail Windows operating system and office sales. 

If Sony can continue to sell the PS3 at their current pace and price, they should be profitable soon.  The only concern with the marketshare dilemna is will third parties continue to support the system.  Surprisingly, we have seen a number of third parties announcing exclusives for the PS3 recently.  So we haven't seen any price/sales fallout yet.

i also support the idea of no price cut for now... and if the price cut come to reality to be one that dont put sony in danger... its way to soon to say the war is over ... some battles have been lost but not the war... hold up just until October and than the price cut to make this the best X-mas for ps3 of all time!

M$ was steadily losing ground to the PS3, so it was a sound decision to cut the price.   If the price cut would have caused them to operate at a loss,  I am 99% certain it wouldn't have happend.  M$ will end up making their profits on the price cut this year after those new customers start buying Software and purchasing live.  The difference between M$ and Sony's proposed price cut, Sony is already losing money and instead of squeaking through with a small profit, it would just through in even more loss.

Sony doesnt make money on a PS3, and if they do, a $50-$100 price drop this early would mean they would stop making ANY profit AGAIN. Price Drop for PS3 will be Late 2009 at the earliest, followed by Microsoft's $20-$50 price cut on all 360 models.

I rather like the sony niche at the moment, a sort of hardcore and alternative gaming console/media center. It's not quite for casual gamers, if you want cheap gaming there are other cheap gaming options. If you can't afford the ps3 then clearly you're only buying it for a few of it's functions because if you add up the multitude of things the console can do it's an excellent price!

I agree with the OP, sony know what they are doing. A price drop would satisfy some consumers but hurt sony and playstation overall.

This pricedrop rumour is what's hurting the Ps3's sales the most, too many people waiting for something that most likely won't come in the near future.

@Damnedl0ser - I wasn't trying to say the MS cut was bad for Microsoft. I was just observing that the conversation at Sony is can the gaming company be healthy and profitable at a lower price point. Clearly, MS was going for marketshare over profitability. They were successful against Sony and failed with the Wii. If Sony comes in last place this generation, but they are profitable, still get all of the third party multi-platform games, and are still able to produce top notch first party games it wouldn't be the end of the world.

Last generation Sony received all of the third party support due to its marketshare, maybe they realize this generation the third parties are going to support both HD consoles regardless of marketshare.

^ Solid point.

people need to chill out with "ps3 is going to drop the price very soon" its not happening till the fall period

there not doing to badly compared to a 200$ 360