The article seems to really skew things for some reason. As others have pointed out, it's actually very common for consoles to sell at little or no margin. Im

The article seems to really skew things for some reason. As others have pointed out, it's actually very common for consoles to sell at little or no margin. Importantly for Sony, the cost of manufacturing the PS4, relative to the cost of the system at retail versus how things were with the PS3 is a vast improvement. Sony is likely taking a small loss on the console, but took very large losses when initially selling the PS3. They were in the position of having to sell a lot of games and accessories to make up for the loss on the PS3, whereas even a single game or accessory sale probably makes up most if not all of their loss on the PS4. The article also really misses some crucial points. For one, it's not just about games. There are accessories (controllers, playstation camera, controller charging stations, covers, etc.), digital downloads (skins, avatars, etc.), Playstation Plus, Sony's music streaming service, and a whole array of revenue streams that are fairly high margin and in most circumstances the loss they took on the console should be made up quickly. From another angle, Sony is already at a price advantage and there's a decent chance they won't discount the device as manufacturing prices drop. This is the exact opposite position the PS3 was in as it was much more expensive than it's competition and Sony had to continually discount the machine to stay in the running with the Xbox 360. Finally, a small aside. I think it's interesting now that the PS4 is on x86 and using a straightforward unified memory architecture. Doing a bump on this (double memory, double cores, double GPU compute units) doesn't seem very far fetched and could probably happen at a similar price point within 5 years. This would give Sony a new console with a huge back catalog of games that would not need to be ported (and could even have "HD" add-ons for download), plus a bunch of new power for games on an architecture developers are already familiar with. All this and it would likely cost a lot less to develop as opposed to developing new hardware from scratch as has been done for every generation previously. I think it would be an interesting move and could allow Sony to have a long running platform to compete with.