You raise some excellent points Buckster. A $6,000,000,000.00 loss on the 360 alone is not possible. Even including R&D, Marketing, Game Development Subsidy and the extension on the Warranty Agreement would in no way come to that amount! As you said M$ have written off just $1B to fund the warranty replacement program, but that does not necessarily mean it will cost that much.

However, this is really not the issue. Lair scored bad, because it was more graphical might over game play. Comparing it to the excellent Bioshock is ridiculous. Bioshock has been widely acclaimed by the majority of the Worldwide Gaming Press. It is selling well, because it is a good game and it lived up to the hype...

... Something SONY is having a major issue in achieving.

M$ can afford to lose money, they make so much on software licensing that they can write off 10's of billions of dollars. SONY simply can not. SONY's hayday was Walkman, PS2 and Trinitron CRT technologies. They do not have a leading portfolio anymore. Even their Bravia HDTV range is not particularly worthy of praise, they get trounced by Phillips, Samsung and Matsushita/Panasonic equivalent technologies.

M$ are still popular here in the UK and whilst Nintendo still PWN in sales, SONY is struggling. In fact in the last couple of weeks M$ have had a 260% increase in sales of 360 consoles. . I bet SONY could really do with a turn of fortunes like that!

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