one thing i just thought of that contributed to the losses was the clearance of the fats. Those were probably manufactured costing $440, and they sold them at $300.

Very good point! Thats just about equivalent to what they were losing on each system at launch, so it's a logical argument.

well i wouldn't go that far, the launch models probably lost around $250 a piece.  They didn't have high sales at that time and it still cost them billions.  But yea the losses should go down next quarter, at least by half i would imagine.  If i do a quick ballpark calculation 500k systems at $140 loss is 70 million dollars.

Oh shoot, you're right. They were losing $240 around launch. My bad.

how much does it cost to make the slim now though? have sony been able to turn a profit on the the slim yet?

We don't know at this point in time. The 80GB phat right before it was discontinued cost $440 to make, and the slim probably easily shaves off at least $50, maybe as much as $100 due to smaller cell, RSX, cheaper casing, different BD Drive, less plastic used, and less cardboard used in the packaging. Since the new boxes are about half the size of the originals, it also means they can pack about 2x as many per shipment, saving heaps in gas money.

From the report:

Year-on-year, debt increased from $7.13 billion to $11.25 billion.

Do they lose money on keeping PSN up?

ouchish
but still better than expected overall.