Sony and microsoft consoles at a loss not to profit from game sales, that's just silly.
They did sold consoles at a loss to be the number one console and then make money on the next one after they cornered the market and can extract real profits. Microsoft always did that with windows/office file format lock-in. Sony always did that with media formats lock-in. They would love to sell you at a loss for the chance to corner a market of betamax, minidisc, laserdisc, memorystick, blue-ray... oh wait, see the relation to PS3 there?
