@ Snozzle
I don't think Sony can afford to lose money for another 7 years.
Why would you think this to be the case? The technology has meanwhile already gotten a lot cheaper to produce, also as time goes on the userbase gets bigger and bigger, so software sales will bring in money even at break even levels with regard to the hardware.
Production costs were very high early on with regard to R&D and production, the PS3 is already very mature so less money has to be invested on R&D. Considering production costs Sony had to make sure they weren't selling too many consoles at a too cheap pricing, but as time goes onwards it becomes more and more interesting to keep the PS3 on the market for as long as possible.
Even the most ardent fan will realize that after 5 years of claiming "this will be the year of the PS3" that something is wrong.
It has only been almost 2 years since the PS3 launched here in Europe and is yet to officially launch in some countries.
The PS3 had a great year with regard to software quality, sales were solid as well. Sure hardware sales could have been even better if they dropped the entry pricing, which hasn't changed for the past 1 and a half years. But considering the economic situation that was probably a wise decision, only drop the pricing if you are near break even with regard to the hardware (it's a far ahead of its time product anyhow, there's plenty of time left to become aggressive with pricing).