Re: Mixed feelings @ Yet Another Anonymous coward
The Xbox 360 was NOT sold at a profit or even break-even at launch. It really didn't become profitable before attached software sales until the Slim model. That isn't factoring the RROD problem, which screwed up the business plan considerably over the original intent.
An Xbox 360 sales wasn't nearly as big a squirt of red ink as the PS3 at launch but it did go down in the debit column. Sony had a ridiculously ambitious concept that had to be revised late in the design cycle to include a dedicated GPU rather than having multiple CELL chips being assigned graphics tasks at the coder's whim. On top of that, Sony want backward compatibility but didn't come up with a practical means to implement it.
On the PS2, the chip that ran PS1 software also performed jobs like reading the controller input and a lot of other very necessary jobs. Thus it was well integrated into the PS2 and didn't add much cost for the portion that was solely needed for PS1 games. On the PS3 the PS2 support was entirely bolted on and completely separate from the PS3's operations, making it pure added cost to have the chips onboard to run PS2 games. If the original multiple CELL concept had survived they might have gone the emulation route and had only a one-time cost for developing the software rather than an added cost to every machine produced.
Sony overcame those problems but it did mean it took a lot longer to start seeing some return on the staggeringly huge investment. Likewise, if Microsoft had only had their intended testing system ready when Xbox 360 production started, the RROD problem would have been detected and fixed far sooner, saving a huge amount of money and damage to the platform's reputation.
Funny thing, Sony sells plenty of Blu-ray decks and a streaming video box that all handle MKV very ably. It feels redundant to have a Blu-ray deck in addition to my PS3 but it handles a bunch of stuff the consoles cannot, solely for lack of the software support. Apparently, the different divisions at Sony have different opinions on the issue.