Sony is learning the hard way that games are about more than higher end graphics - they are being outsold 5-1 in Japan by the Wii:

Sony sold 45,321 units of the PS3 in May, compared with 251,794 units of the Wii. In April, the ratio was four to one in favor of the Wii, according to Japanese game magazine publisher Enterbrain.

That's got to hurt - and it has in terms of revenue losses: they lost $1.91 billion last year in the games division. That's not really a sustainable level of loss - bear in mind that their direct competition is for "hard core" gamers, and Microsoft can afford to burn a lot more cash on that battle. Meanwhile, Nintendo actually makes money on each console sold, and they're mostly hitting a different game demographic anyway. Depending on how the other parts of Sony do over the next year or two, I wouldn't be at all surprised to see Sony exit the game console business completely.

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