@Euphoria14: It's in my reply to Skeeuk, before your post. It was transcribed by BKK2 from the financial report audio webcast, I heard it as well.

EDIT - Your article refers to the whole PS3 operation being profitable, not just hardware itself.

I just saw that now. Thanks.

USA != World
In USA, with weak $ PS3 is most probably still losing a bit or just starting breaking even.
In EU, if iSuppli October 2008 estimate were right, it was already breaking even on HW last Xmas.
Japan ???

@Alby_da_Wolf: I don't trust the iSuppli estimates, or any estimates from analysts for that matter. Judging from those, the PS3 has already broken even several times, and Sony always says the opposite in their financial report (where they're legally obligated to tell the truth).

^^
iSuppli estimates only materials, workforce and a few other things' costs and, I guess from the single cost they list, they compute also reseller profit margin in those costs. But they say quite clearly that some costs aren't included. Sony in its reports obviously accounts for not only manufacturing costs but for all of them, there are other expenses, research and development, process refinement and a lot of other things that aren't accounted for in single unit's manufacturing cost. When HW starts being sold at a profit it starts covering all those expenses not included in manufacturing costs, but I'm persuaded like you that it can't by any means totally cover them right now, as if there is already a profit on HW is still very tiny and in the worst case a tiny profit in EU could still be nullified by losses in USA. Also, the largest part of HW produced in the last six months was sold for Xmas, and started being produced and stockpiled months before, so the largest part of this HW was sold at a loss in USA and, in the best case, breaking even in EU, this means that it's perfectly possible PS3 is starting to produce small profits on HW right now, but still not enough to recover past losses: smaller quantities of HW sold at a still very small profit now added to much larger quantities sold at a bigger loss some months ago results undeniably in an overall loss for H2 FY 2008, and most probably also for Q4 FY 2008.

No, losing money is definatly not good. Profits are a little more importaint then moving boxes. Those boxes need to turn a profit.

Dreamcast much like Sega in general was pretty lame.

Whatever happened to their plans to recover R&D cost by using the Cell chip in other devices?

The problem for most on these forums no matter where they sit in the debate is a case of clear near sightedness. You simply must view Sony as a whole. Sony was able to aggressively price the PS3 due to the company as a whole making this possible. The gaming division was not self sufficient. You cannot view any division at Sony on a local level. Stringer talked about doing this, but there is no indication that it became a reality.

This is the reality at Sony. They are losing money. They owe a lot of money. They are in a economic recession. Which means it is taking longer to make money, and finally they are up against a poor currency exchange rate. The bottom line is this Sony is in no position to abandon profit, or look the proverbial gift horse in the mouth.

When a division any division begins to bring in a profit Sony is going to be using that profit to offset losses in other divisions. Pay down that debt load, and bring dividends to their investors. The gaming division alone has brought down has a billion dollars of debt on the shoulder of Sony in loans alone. Which is what a lot of members forget. Sony couldn't afford the manufacturing and launch of the console alone. They went borrowing against the console.

Frankly any consideration of price cutting on this console was idiotic once the economy hit the skids. The question is not what can Sony do to win. I am sorry the contest is over Sony has lost this battle. What matters now is not losing the war, and the number one way to do that is to survive to fight another day. The true fan must understand this, and actually be happy.

In a bizarre way if you find Sony cutting the price on their console that is when you should get upset. That has a greater then fifty percent chance of meaning they are abandoning the console. That would mean they have given up on the console being a profitable venture period, and have decided to do what it takes to liquidate stock.

Oh woah. It's amazing they've survived - credit goes to the long life of the ps2.

Anyways taking into account the currency value shift and increased revenue from a bigger userbase, a 2009 pricecut will happen. Now the question is: E3 or Fall season?