If you calculate how much money Sony will win after they sell those 500 000 PS3, it amounts to - $150 million approximatively I don't know how much their making on games, but that's a lot of money down the tubes...

But they are selling at a huge loss. It's something like 300million dollars they are expecting to lose at the beginning of the PS3s life. They also had to take out a $1bn loan I think to cover the costs of R&D.

Also the games will be expensive if they want profit - the cost it takes to make a HD game is multiple times more expensive than a non HD game (source: NOM or NGC magazines). Then there is blu ray - that isn;t cheap to develop for, nor is it cheap to use blu ray as a medium to store games.

But hey, prices drop as technology gets old...

Farrooj, it costs a lot of money to manufacture games and games sytems.

Anyway, Microsoft can afford billions in losses because Bill Gates is, or at least was, backing it with his own cash.

Microsoft lost more than that, actually. A massive 7 billion dollars.

"By contrast, Microsoft has never made money on the Xbox. Since the console went on sale in 2001, the company's gaming division has burned through over $7 billion, according to its own financial statements."

http://www.gamespot.com/news/6152408.html

As for Microsoft being able to afford it. Another loss like that on 360 and there'll likely be a lot of yelling from shareholders to make sure Xbox 720 never sees the light of day.

Wow, I didn't know that yodariquo, maybe it means they spent 7 billion dollars in expenditure and got 3 billion in income, resulting in a four billion dollar loss...

Not suprised...
SONY is relatively young to Nintendo when it comes to gaming CONSOLES....

Microsoft was all PC gaming(and software---everything must run...Windows?) until they decided to jump into the pool to gain even more money(which as we see there, that didnt happen with Xbox) than they already have otherwise...
SONY aswell..they already are a trusted name in other home electronics...and they pretty much OWN those markets....but yet they hopped into gaming to get more profits eh..becasue if Nintendo can do it...they can do it too?

Well, gues what Nintendo "owns" the GAMING market. Simple as that.

Sony may have sold more consoles(pure numbers) BUT Nintendo are in the gamers hearts and minds.

Thank you.

sony's game dept. is actually one of the last remaining profitable areas of the company :/ im glad im not a shareholder!