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[Mindlog]

Not in the competitors hands,man...the goal should be 'one sony' not 'one sony+microsoft+nintendo+apple+panasonic jungle'

Sony movies are available on multiple platforms. If S-akai is subscription based they'd be making far more money off it than the hardware. They'd also still get to sell a variant of their virtual hardware to core customers that aren't satisfied with streaming.

However, I've been having renewed doubts to the whole 'cloud revolution.' In a world with screen and local processing ubiquity it doesn't make any sense. For another thread.

 

[Sid]

No, that is backwards thinking that has gotten Sony in a lot of trouble this past decade.

Sony needs to leverage the playstation brand on all TVs, all phones, all tablets, and yes all consoles too. Gaikai is their venue to accomplishing that.

How successful would Netflix be if it was only compatible with a Netflix branded box?

That isn't even remotely comparable,sony bought gaikai to gain a competitive advantage for their products.

 

[gofreak]

In a world with screen and local processing ubiquity it doesn't make any sense. For another thread.

Sufficient local processing for high end gaming is far from ubiquitous.

There is also the question of barriers to play even where local processing is present.

Possibly a debate for another thread for sure, although I think it'll be something that is a central component next gen.

That isn't even remotely comparable,sony bought gaikai to gain a competitive advantage for their products.

SCE's products are, primarily, its games.

Maybe Sony will lock their cloud services down to Sony-only hardware, but longer term I think they will cross those borders. Competition will force them to if nothing else. In another way with PSM they're already reaching out for partners beyond their sibling subsidiaries at Sony. They can still create 'optimised' experiences out of the box with Sony hardware (e.g. bundling of dualshocks with TVs and tablets or whatever) and co-market with Sony devices. I think broad relevance and acceptance of their service as some kind of standard would feed back and help their hardware business, while tying it to Sony hardware exclusively could be shooting themselves in the foot. And if a customer is looking for a game-optimised or game enhancing devices to use with their PS cloud service, SCE's own will be a natural first port of call (Vita, PS4, PS HMD...etc.).

 

[Angelus Errare]

I think it will happen next-gen. May be later in the gen, but it WILL happen.

Sony doesn't make anything off hardware, and getting their software into as many hands as possible should be the ultimate goal for their business.

Other than PS3 being the exception (due various reasons) this is untrue.

 

[AgentChris]

I can't wait to see Ready at Dawn's PS4 game!!

 

[DieH@rd]

Other than PS3 being the exception (due various reasons) this is untrue.

Sony started earning money from PS3 hardware two years ago. In the beginning they've spent a shitton establishing a new bluray production chain, but eventually they've got profitable with PS3. And after fhe arrival of first PS3 slim, their sales jumped a lot. They've almost catched X360, even though they were so late with launch.
http://www.slashgear.com/sony-final...e-no-price-cut-in-foreseeable-future-3092255/

 

[Angelus Errare]

Sony started earning money from PS3 hardware two years ago. In the beginning they've spent a shitton establishing a new bluray production chain, but eventually they've got profitable with PS3. And after fhe arrival of first PS3 slim, their sales jumped a lot. They've almost catched X360, even though they were so late with launch.
http://www.slashgear.com/sony-final...e-no-price-cut-in-foreseeable-future-3092255/

I take back what I said.

Sawyer, your post is now completely untrue.

 

[James Sawyer Ford]

I take back what I said.

Sawyer, your post is now completely untrue.

My post is completely untrue when Sony lost 4 billion dollars on PS3 with subsidized hardware pricing and has only made up a fraction of that with profitability on console sales the past two years?

The console manufacturers don't make much at all on hardware, it's nearly all on software, services, and licensing fees.

Even Nintendo is getting squeezed, with them eating the cost of the 3DS. Traditionally they have always sold at a profit from the get-go.

 

[DieH@rd]

Whitout any doubt, I expect that PS3 will surpass X360 total sales numbers during 2013. Impressive array of 1st party games and another pricedropp will surely enable so.

The one think i dont like is flexible retail pricing for PS3 Superslim. Nobody knows how much those superslim consoles cost today, total madness.

 

[Kazuma Kiryu]

Whitout any doubt, I expect that PS3 will surpass X360 total sales numbers during 2013. Impressive array of 1st party games and another pricedropp will surely enable so.

The one think i dont like is flexible retail pricing for PS3 Superslim. Nobody knows how much those superslim consoles cost today, total madness.

tbh, they look pretty cheap, i'm sure they making some nice cash on it.

 

[Mindlog]

Sufficient local processing for high end gaming is far from ubiquitous.

There is also the question of barriers to play even where local processing is present.

Possibly a debate for another thread for sure, although I think it'll be something that is a central component next gen.

It's an interesting subject. While I agree that we're not there for high-end gaming yet I'm uncertain if the differences will be big enough to create a market that sustains large server farms long enough to get a return on their investment. High-end gaming tends to be a quickly moving target. (Of course I look silly saying all this at the tail end of a 7 year+ generation )

All just fun speculation of course. Peering into the future and whatnot. I won't know for certain until Smartphones lose their screens. I would welcome a screen-less micro-computer future. Again, another thread.

 

[thehypocrite]

Sufficient local processing for high end gaming is far from ubiquitous.

There is also the question of barriers to play even where local processing is present.

Possibly a debate for another thread for sure, although I think it'll be something that is a central component next gen.




SCE's products are, primarily, its games.

Maybe Sony will lock their cloud services down to Sony-only hardware, but longer term I think they will cross those borders. Competition will force them to if nothing else. In another way with PSM they're already reaching out for partners beyond their sibling subsidiaries at Sony. They can still create 'optimised' experiences out of the box with Sony hardware (e.g. bundling of dualshocks with TVs and tablets or whatever) and co-market with Sony devices. I think broad relevance and acceptance of their service as some kind of standard would feed back and help their hardware business, while tying it to Sony hardware exclusively could be shooting themselves in the foot. And if a customer is looking for a game-optimised or game enhancing devices to use with their PS cloud service, SCE's own will be a natural first port of call (Vita, PS4, PS HMD...etc.).

I agree with you, with Gaikai tech Sony could make PlayStation a household ubiquitous service. I wish you could make that choice gofreak, Sony should use Gaikai for a PlayStation everywhere regardless of brands. A subscription service needs to follow the consumers, not force the consumers on a certain direction.

Just using gaikai on Sony only products or just as a BC solution for an eventual PS4 is undercutting the potential for it to blow up.

Hopefully Kaz can see it the same way.

 

[phosphor112]

I agree with you, with Gaikai tech Sony could make PlayStation a household ubiquitous service. I wish you could make that choice gofreak, Sony should use Gaikai for a PlayStation everywhere regardless of brands. A subscription service needs to follow the consumers, not force the consumers on a certain direction.

Just using gaikai on Sony only products or just as a BC solution for an eventual PS4 is undercutting the potential for it to blow up.

Hopefully Kaz can see it the same way.

Then what is the incentive for buying a PS4 or PS5 over using Gaikai on other devices?

 

[Mario007]

Then what is the incentive for buying a PS4 or PS5 over using Gaikai on other devices?

Exactly this.

They may use Gakai for demos on other devices (after all that's what Gakai did before- demos). Could be a good way to get people to buy the ps4.

 

[Angelus Errare]

My post is completely untrue when Sony lost 4 billion dollars on PS3 with subsidized hardware pricing and has only made up a fraction of that with profitability on console sales the past two years?

The console manufacturers don't make much at all on hardware, it's nearly all on software, services, and licensing fees.

Even Nintendo is getting squeezed, with them eating the cost of the 3DS. Traditionally they have always sold at a profit from the get-go.

Again your statement was that Sony does not make money off hardware. This IS completely untrue. Sony might not sell their hardware at a profit from the get go, but to say they don't make money off their hardware is completely false. They made money from PS1, PS2, PSP, Vita, hell even the PSX (only machine they sold at a profit from the get go).

 

[Mario007]

Again your statement was that Sony does not make money off hardware. This IS completely untrue. Sony might not sell their hardware at a profit from the get go, but to say they don't make money off their hardware is completely false. They made money from PS1, PS2, PSP, Vita, hell even the PSX (only machine they sold at a profit from the get go).

They are probably making a lot of cash on the Super Slim now as well. I mean the price stayed the same (or went up 10 euro even) and yet the whole thing is most definitely much cheaper to produce than the Slim. I wouldn't be shocked if Sony could drop the price by a 100 on those models and still make a nice profit.

 

[thehypocrite]

Then what is the incentive for buying a PS4 or PS5 over using Gaikai on other devices?

What was the incentive before gaikai?

The service will have compromises, not everyone will want the "diluted" experience, others might not like the subscription model that it requires, or the fact that no ownership exists. The ones looking for the pure experience can always get the PS4, however, if they don't want to for any reason, they could subscribe to the service and Sony can make money from them instead of not getting anything from those consumers.

This is for the netflix/spotify/Digital media consumption consumer. PS4 will still be the premier option to play PS4 games, but Gaikai will reach out to a larger pool of potential consumers than a console could ever do.

Edit:Consumers can get only netflix, or they could buy just bluray or they can get both.

Gaikai could be the netflix and the PS4 can be the product for the Bluray only or Bluray/Netflix consumer.

 

[Mario007]

What was the incentive before gaikai?

The service will have compromises, not everyone will want the "diluted" experience, others might not like the subscription model that it requires, or the fact that no ownership exists. The ones looking for the pure experience can always get the PS4, however, if they don't want to for any reason, they could subscribe to the service and Sony can make money from them instead of not getting anything from those consumers.

This is for the netflix/spotify/Digital media consumption consumer. PS4 will still be the premier option to play PS4 games, but Gaikai will reach out to a larger pool of potential consumers than a console could ever do.

You do know they could just use Gakai for a better structure for their MU and VU servers, right?

 

[gundamkyoukai]

I agree with you, with Gaikai tech Sony could make PlayStation a household ubiquitous service. I wish you could make that choice gofreak, Sony should use Gaikai for a PlayStation everywhere regardless of brands. A subscription service needs to follow the consumers, not force the consumers on a certain direction.

Just using gaikai on Sony only products or just as a BC solution for an eventual PS4 is undercutting the potential for it to blow up.

Hopefully Kaz can see it the same way.

This will happen but not any time soon .
The started up cost alone would be crazy high , the internet infrastructure in not ready in ton of places .
If a DD only console can't make right now in today market must less streaming only .

EDIT i also forget to mention that a streaming service depends on more out side factors to work also.

 

[DieH@rd]

They are probably making a lot of cash on the Super Slim now as well. I mean the price stayed the same (or went up 10 euro even) and yet the whole thing is most definitely much cheaper to produce than the Slim. I wouldn't be shocked if Sony could drop the price by a 100 on those models and still make a nice profit.

They will bring the price down in feb/march after holiday sales die down. Just in time for GoW Ascension and GDC [possible PS4 unveil].

 

[thehypocrite]

You do know they could just use Gakai for a better structure for their MU and VU servers, right?

Using it just for that would be undercutting the potential for it to blow up. Likewise if they use it only for Sony products or just as a BC solution for an eventual PS4. They need to have ambition and they need to hit it big. Undercutting the potential of your product is a sin they shouldn't commit.

 

[thehypocrite]

This will happen but not any time soon .
The started up cost alone would be crazy high , the internet infrastructure in not ready in ton of places .
If a DD only console can't make right now in today market must less streaming only .

I didn't say it would be cheap, I didn't say it would be quick, but a product without goals and a company without strategy and vision is crushed out of the market. If this is what they believe they need to put their backs into it.

They need to work to make it a reality.

 

[deleted]

Again your statement was that Sony does not make money off hardware. This IS completely untrue. Sony might not sell their hardware at a profit from the get go, but to say they don't make money off their hardware is completely false. They made money from PS1, PS2, PSP, Vita, hell even the PSX (only machine they sold at a profit from the get go).

Correct me if I'm wrong, but didn't they burn all of the money they made with the PSX and PS2 during their early PS3 years? These last two years aren't nearly enough to make a substancial part of that back.

I wouldn't call that making money, even if there is a profit now.

 

[waxer]

I always just assumed they would use it to make streaming off your own games console better. With a cheaper psp that just needs to stream games from home. Or maybe even wii u style doubles as the controller when at home as well.

 

[thehypocrite]

Correct me if I'm wrong, but didn't they burn all of the money they made with the PSX and PS2 during their early PS3 years? These last two years aren't nearly enough to make a substancial part of that back.

I wouldn't call that making money, even if there is a profit now.

You're wrong.

 

[phosphor112]

Using it just for that would be undercutting the potential for it to blow up. Likewise if they use it only for Sony products or just as a BC solution for an eventual PS4. They need to have ambition and they need to hit it big. Undercutting the potential of your product is a sin they shouldn't commit.

They aren't going to ignore it's future uses. It's just highly impractical right now to expect those other features at this time.

 

[gundamkyoukai]

I didn't say it would be cheap, I didn't say it would be quick, but a product without goals and a company without strategy and vision is crushed out of the market. If this is what they believe they need to put their backs into it.

They need to work to make it a reality.

Well it has to be in steps .
First on PS4 , then on other Sony devices , then on everything else .
Asking for it to be on devices of all companies for get go in current market place would make no sense IMO.

 

[thehypocrite]

They aren't going to ignore it's future uses. It's just highly impractical right now to expect those other features at this time.

So they should wait for a competitor to make it practical instead? They need to do it first to have a better chance at success. They need to make it practical it won't be huge from the onset, but they need work on it to make it grow. Success is never the product of inertia, is the complete opposite it requires actions, standing pat, sitting on this waiting for some proverbial perfect moment is shortsighted. Even more when Google/MSFT/APPLE are your competitors.

Well it has to be in steps .
First on PS4 , then on other Sony devices , then on everything else .
Asking for it to be on devices of all companies for get go in current market place would make no sense IMO.

This is an organic limitation, as they need to ramp up and the server cost need to ramp up according to demand. However why would they launch PS4 without it? If it's already set and working on multiple devices why hold it back for PS4?

 

[pharmboy044]

You're wrong.

He's actually right. Sony has lost a lot on the PS3 and probably will never recoup the costs.

 

[gofreak]

This will happen but not any time soon .
The started up cost alone would be crazy high , the internet infrastructure in not ready in ton of places .
If a DD only console can't make right now in today market must less streaming only .

We're not talking about streaming-only consoles.

Instead we're debating what will be available on that service and where it will be available.

With regard to the 'what' - PS4 is the only software platform that they'll have the from-scratch opportunity to license for cloud delivery. It'd be easier to make happen on a technical level than PS3 content. I've little doubt they'll make PS4 content available on the service - whether it'll be the whole platform or not, I don't know, but I wouldn't be surprised if it'll be more or less a universal first-class delivery mechanism alongside retail disc and digital download. (Citation in support of the idea of contemporary/PS4 games: "SCE will deliver a world-class cloud-streaming service that allows users to instantly enjoy a broad array of content ranging from immersive core games with rich graphics ", "As a new member of the Sony Computer Entertainment family, we're working even harder to ensure the world's best entertainment content is delivered instantly to you")

As for the 'where' - gaikai's job listings might give a hint. There seems to be the suggestion that the main client will be a webkit or html5 based piece of software that will accomodate wide range of devices. "As a part of Sony Computer Entertainment, Gaikai is leading the cloud gaming revolution, putting console-quality video games on any device, from TVs to consoles to mobile devices and beyond." with work 'Integrating with other technology stacks and application components from other Gaikai teams, other SCE teams, and various device manufacturers and middleware providers." The Sony acquisition press release talks about the delivery of Sony's cloud service 'on a variety of internet-connected devices.'

Now, maybe it'll just be Sony internet-connected devices - Sony TVs and Sony consoles and Sony mobile devices...perhaps 'various device manufacturers' is a reference to legacy contracts Sony still needs to fulfil post acquisition, but the simplest and most flexible approach for Sony would be a web-based service/client, and if that's the case, I don't see them holding it to any one device or set of devices for very long, if at all.

 

[KageMaru]

You're wrong.

I'm pretty sure he's not wrong.

 

[thehypocrite]

He's actually right. Sony has lost a lot on the PS3 and probably will never recoup the costs.

That's not what he posted. So you and him are wrong.

Edit:

I'm pretty sure he's not wrong.

You are also wrong.

 

[deleted]

That's not what he posted. So you and him are wrong.

Edit:



You are also wrong.

Ok, I remembered the details wrong. Most of their PSX profits, not all of it.
My point still stands though, these last two years aren't enough to turn the PS3 into an overall profitable console.

 

[Mario007]

That's not what he posted. So you and him are wrong.

Edit:



You are also wrong.

Why is there a fall in 09 and 10 when those years were profitable for PS3, PSP was still profitable, PS2 was profitbale and Vita hasn't even launched yet?

 

[thehypocrite]

Ok, I remembered the details wrong. Most of their PSX profits, not all of it.
My point still stands though, these last two years aren't enough to turn the PS3 into an overall profitable console.

Is rather likely that the PS3 will never be a profitable project for them. However that's a sunk cost that GAF/Investors/Gamers should get over it. It's a pointless discussion.

PS4 will be made for the potential to make money from it. The only thing that matters going forward is that they're making money from the PS3/PSP/Vita now.

Why is there a fall in 09 and 10 when those years were profitable for PS3, PSP was still profitable, PS2 was profitbale and Vita hasn't even launched yet?

Because the slim and the console rebranding/marketing costs money.

http://en.wikipedia.org/wiki/PlayStation_3#PS3_Slim_and_console_rebranding

 

[deleted]

Is rather likely that the PS3 will never be profitable project for them. However that's a sunk cost that GAF/Investors/Gamers should get over it. Its a pointless discussion.

PS4 will be made for the potential to make money from it. The only thing that matters going forward is that they're making money from the PS3/PSP/Vita now.



Because the slim and the console rebranding/marketing costs money.

http://en.wikipedia.org/wiki/PlayStation_3#PS3_Slim_and_console_rebranding

I agree.

 

[onQ123]

Is rather likely that the PS3 will never be a profitable project for them. However that's a sunk cost that GAF/Investors/Gamers should get over it. It's a pointless discussion.

The fact that it's a connected platform that could stay on the market for about 5 more years & still pull in money from PSN I think it will make a profit over time.

 

[Perkel]

What i love most about that chart is that it misses that PS3 was crucial to BluRay format victory. Sure maybe bluray licensing fee didn't yet recovered ps3 loss but Sony will get licensing fee from each Bluray disc on market for xx years that alone is big reason why they wanted BD in PS3

 

[StevieP]

What i love most about that chart is that it misses that PS3 was crucial to BluRay format victory. Sure maybe bluray licensing fee didn't yet recovered ps3 loss but Sony will get licensing fee from each Bluray disc on market for xx years that alone is big reason why they wanted BD in PS3

Blu Ray licensing was calculated by Opiate and a few others on this forum earlier this year. Although I do not recall the results, suffice to say they were close to negligable to making up the losses. A tiny, tiny drop in the bucket.

 

[KageMaru]

That's not what he posted. So you and him are wrong.

Edit:



You are also wrong.

Sorry for the stupid question, but how does that graph prove me wrong? As far as I understand it, that graph includes any money made from the PSP, correct? So can we really tell from that graph that Sony didn't lose the profits made from the PS1 and PS2?

Honest questions since I hardly pay attention to financials, but I tend to understand it well enough.

 

[thehypocrite]

The fact that it's a connected platform that could stay on the market for about 5 more years & still pull in money from PSN I think it will make a profit over time.

That's why I didn't use absolutes, it could happen, I just think it's unlikely and a pointless topic to discuss.

What i love most about that chart is that it misses that PS3 was crucial to BluRay format victory. Sure maybe bluray licensing fee didn't yet recovered ps3 loss but Sony will get licensing fee from each Bluray disc on market for xx years that alone is big reason why they wanted BD in PS3

Not even a Pyrrhic victory IMO.

Edit:

Sorry for the stupid question, but how does that graph prove me wrong? As far as I understand it, that graph includes any money made from the PSP, correct? So can we really tell from that graph that Sony didn't lose the profits made from the PS1 and PS2?

Honest questions since I hardly pay attention to financials, but I tend to understand it well enough.

You seem to be reaching now, the poster said this:

"Correct me if I'm wrong, but didn't they burn all of the money they made with the PSX and PS2 during their early PS3 years? These last two years aren't nearly enough to make a substancial part of that back.

I wouldn't call that making money, even if there is a profit now."

In the context he refers to all the profits they've made since they started making gaming consoles. You now want to say that the PSP money is the difference? and how can you, I or anyone else could that?

Stop.

 

[Mario007]

Is rather likely that the PS3 will never be a profitable project for them. However that's a sunk cost that GAF/Investors/Gamers should get over it. It's a pointless discussion.

PS4 will be made for the potential to make money from it. The only thing that matters going forward is that they're making money from the PS3/PSP/Vita now.



Because the slim and the console rebranding/marketing costs money.

http://en.wikipedia.org/wiki/PlayStation_3#PS3_Slim_and_console_rebranding

But as far as I know the playstation division was showing profits for 09 and 10, with the marketing and rebranding being incorporated in?

 

[KageMaru]

You seem to be reaching now, the poster said this:



In the context he refers to all the profits they've made since they started making gaming consoles. You now want to say that the PSP money is the difference? and how can you, I or anyone else could that?

Stop.

WTF? I asked an honest question, what the hell do I gain by how much Sony lost with the PS3? Regardless if you're right or I'm right, they lost a shit ton of money.

I read his post as losing all the money made on the PSX and PS2, not all the money since they started making consoles. In fact, I would imagine most with good reading comprehension would agree. Not really sure how else you can read this exact part:

didn't they burn all of the money they made with the PSX and PS2 during their early PS3 years?

He specifically said "with" the PSX and PS2, not "during".

I was asking honest questions to have a better understanding of what you were trying to explain or the point you were trying to make. I didn't ask you to be a dick for no reason.

Edit:

Thinking about it more, it doesn't really make sense to include the psp since that launched in 2005. Sorry about that, for some reason I thought it launched earlier. I still didn't have some silly agenda with my original questions, I was just confused. =P

 

[Canis lupus]

Can Sony upgrade the friendlists to 200 or even more with the PS4?

 

[James Sawyer Ford]

This entire discussion revolves around whether or not Sony does business with the intention of making money on hardware alone.

They do not.

Not even in the PS1/PS2 era.

They take upfront losses, eventually break even, and then finally profit slightly from hardware sales alone. This ultimately is a wash (in the PS1/PS2 era), as the losses tend to negate whatever profits are made at the back end of the cycle. PS3 is different because the losses were far larger than they could reasonably expect to recover.

Where they make all of their money is on software, services, and licensing fees.

It makes no sense for Sony to restrict Playstation Gaikai services to only Sony branded devices.

It makes all the sense in the world to put Playstation on as many devices as possible, charge for streaming the rental of individual games, or package together a service like Netflix and charge a monthly rate for unlimited content.

Like I said, do not be surprised if you'll be able to play PS4 games streaming to your 720 next-gen.

 

[SSM25]

That's not what he posted. So you and him are wrong.

Edit:



You are also wrong.

Wow! MS is a looong way from making a cent from the Xbox, and we are expecting them to throw lots of money to build an uber powerful x720?

 

[James Sawyer Ford]

Wow! MS is a looong way from making a cent from the Xbox, and we are expecting them to throw lots of money to build an uber powerful x720?

I expect them to build a powerful system.

What I don't expect is them to lose billions on the hardware like some people do, just because financially they have enough money to do so.

Microsoft does not operate in a vacuum where their best interest is to just throw money away at the gaming division to win some victory of the living room that they cannot win.

There's a thing called opportunity cost and Microsoft and their shareholders want to see a return on their investment. Three generations of losses will not be looked at fondly by upper management. In fact, Xbox was sold to investors as being a loss the first gen, moving towards profitability the second gen, and as the third gen rolled around they would be near profitability from the start.

Every pricing decision Microsoft has made recently suggests that they're unwilling to lose tons of money subsidizing hardware. Xbox 360 has received micro price drops and SKU reshuffling. People laughed when Kinect's $150 price tag was revealed.

Microsoft will go powerful for the Xbox 720, but they will not be eating billions just to somehow get an advantage against Sony. They will aim for profitability day 1.

 

[DieH@rd]

Wow! MS is a looong way from making a cent from the Xbox, and we are expecting them to throw lots of money to build an uber powerful x720?

Ads! Ads! Ads!

 

[Proelite]

Ads! Ads! Ads!

+ Monthly live, cable, and deferred payment fees.

 

[SSM25]

I expect them to build a powerful system.

What I don't expect is them to lose billions on the hardware like some people do, just because financially they have enough money to do so.

Microsoft does not operate in a vacuum where their best interest is to just throw money away at the gaming division to win some victory of the living room that they cannot win.

There's a thing called opportunity cost and Microsoft and their shareholders want to see a return on their investment. Three generations of losses will not be looked at fondly by upper management. In fact, Xbox was sold to investors as being a loss the first gen, moving towards profitability the second gen, and as the third gen rolled around they would be near profitability from the start.

Every pricing decision Microsoft has made recently suggests that they're unwilling to lose tons of money subsidizing hardware. Xbox 360 has received micro price drops and SKU reshuffling. People laughed when Kinect's $150 price tag was revealed.

Microsoft will go powerful for the Xbox 720, but they will not be eating billions just to somehow get an advantage against Sony. They will aim for profitability day 1.

Powerful, I agree.. uber powerful ( 8 GB of GDDR5, gtx 680 like gpu and some other stuff in the realm of fantasies some prople are expecting) of course not..