Profitability

This, above all other factors, is a major reason for Sony to exit hardware and focus entirely on software publishing. Sony is expecting a boost in its games division for this fiscal year, with a target of 13 million PS3s sold, but at the same time, Sony Corp. believes its games business will remain unprofitable. The entire company as a whole is forecasting a loss of $1.15 billion. The gaming division continues to hemorrhage millions and that's why we haven't seen any significant price drops on the PS3. Sony still loses and estimated 10 percent on each PS3 unit sold. The company desperately needs to drop the price in order to stop bleeding market share to competitors, but can they really afford to slash the MSRP by $100? It's a very tough balancing act.

[Pictured: Sony CFO Nobuyuki Oneda]