Can Microsoft and Sony make money on game consoles?

Updated

Sony (SNE) and Microsoft (MSFT) have cut prices on some versions of their video consoles, the PS3 and Xbox 360, down to $299. They hope to use the new pricing to take market share from one another and industry leader, Nintendo.

The question is whether the move by the two companies is one where they lose money on every sale and try to make it up in volume. In other words, the price cuts may make the businesses financial unsustainable.

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