There haven't been a hundred other games that haven't mattered.  And as has been seen in Japan earlier this year games that are only Yakuza and White Knight Chronicles size can put the PS3 over the Wii for eleven weeks straight.  Those games aren't a tenth of what the Final Fantasies, GT5, and Kingdom Hearts can do for sales.

You realize not only is KH not a system seller that KH2 sold less then the first game.  Second this has been discuessed to death but you don't know which console it's going to be on, what if it lands on Wii or 360?  It destroys part of your theory.  The fact again that, PS3 outsold Wii in Japan during Wii's worst game drought in Japan ever and those were PS3's best weeks, you must realize the PS3 on it's best day barely outsold Wii on its worst and didn't even make a dent in the lead Wii already has.  And finally no PS3 game has even sold a million in Japan... FFXIII is probably going to be the first, but right now not even MGS4 could do it.

All these points are common sense.

I was under the impression that the $500 models were a holiday special edition only.... do they still sell these as I never see any at Wal-Marts or Best Buys or Game Stops.

Also, Sony really has no control over when the PS3's life will end.  All they can do is advertise and hope it gains enough to make it past the 360 before the next generation, which has a slim to none chance of happening.  The consumers and thus retailers decide when a product is stopped, as we've already gone over this.  Sony won't want to end the PS3's life early, but if it isn't selling and the NextBox and Wii 2 are out, then it's bye bye PS3.  That is unless Sony kills their hopes for the next generation by postponing the PS4 for multiple years or even all-together for a generation.

^We've gone over this already, indeed.
And I keep saying that it doesn't have to make past the 360. Retailers don't check VGChartz for total install numbers and don't care about "console wars". It only has to provide retailers with healthy profits on software and accessories, enough to make its presence worth it. And that's all about market shares and market overlapping.
But the OP idea is that Sony's investors might pressure the company into cutting the PS3 life short, that's what I don't see any sense in and why I wrote about their interest.

Except they are now predicting even more losses for this current financial year. So by March 31 2010 the PS3 would have had 4 successive years losing money. Then by 2012 a new generation of consoles will probably be out, with 1-2 players already on the market. Then at that time they are going to have to create a console which they can profitably sell to capture the market again. Its not fun times unfortunately for Sony.

It's not fun times for Sony, indeed. But it's not fun times all around for japanese electronic producers with the global recession and appreciated yen: Hitachi posted losses for 8.1B dollars.

Why exactly is the PS3 that is losing money right now if Sony projects losses for the current financial year? Certainly the R&D for the PSP Go, the music and software store, the slim model and most probably the PS4 is accounted for in past and projected financial reports.

Are you denying that each PS3 costing $440 and sold at $399 today brings profit to Sony in a matter of months?

No, theres no denial here. Its a whole gamut of issues for SCE with the slim+price cut model attempting to solve their systematic problem of a large 1st party development and low userbase to sell games to with some of the highest development cost in the industry. (Sony spends more on average than pretty much everyone).  If the only major costs was $40 on every PS3 they would probably be making a profit with the amount of software sold, so it indicates that their problems are much bigger than just the relative profitability of the PS3 hardware.

R+D for the PS3 slim would be paid for by cheaper hardware costs, ditto for the PSP Go. Im not sure how much the music store/software store would cost to create im sorry.

The issue really as Happy Squirrel said earlier in the thread is that the PS3 may end up a middle child. Not as cheap as the Xbox 360, not as desirable as the Wii and not as advanced as a next generation console. Furthermore they run a potential risk that a next generation console will hit a home run and start to erode their own userbase before they have a chance to respond which lowers their chances to launch successfully for the next generation and it lowers their brand equity by stealing their PS3 userbase right from under them.

Thus guy obviously want Sony(and MS) to get out of buisnes.I dont know why you hate HD consoles so bad. Did they raped you or something?

@Squill

R&D (slim, PS4, PSPGo, mobile integration) will pay for itself over time, but before that happens it's accounted as an expense.

Also, I can't see Sony's 1st party development as a "systematic problem". I doubt there's any 1st party game that fails to bring a profit, actually, and they are a great showcase for the console.

Let's face it: with all the doom and gloom, Sony must be doing something right if the PS3 routinely sells 15% less than the much cheaper - and pushed in America - 360.

As for risks, sure. A lot of things can happen. But the market situation today is so different from everything people expected 3 years ago that making projections for 2012 and after should be done with way more cautiousness. Maybe by then the handhelds will have cannibalized some sectors of the market, or Apple will have jumped in the fray, or the BluRay/HD adoption might have a post-recession rebound boom.

Im starting to feel like a jerk, so I will say that the PS3 hardware and user experience are both excellent. Sony has done a great job with the PS3 and their efforts are worthwhile.

The reason why I state that they are likely having trouble with their 1st party software sales is that they are one of the largest publishers of software in the world and all large software publishers are having trouble. You don't define their profitability by the games they release, because so many games simply do not make it to the light of day, and there are many bundles which we cannot distinguish from sales.

The 360 is selling about 1/3rd more than the PS3 in America (rough) as at last weeks numbers, however the Xbox 360s ASP is about $270 which is about a third less than the PS3 so on balance both consoles can do equally well in the market. Its up to Sony/Microsoft really to win it between them.

Yes, you need caution. A new console could fizzle or it could completely take over the market and the market conditions themselves could change. But this is the danger for the PS3 as a console as the profitability that it needs is projected into the uncertain future.