That breaks down to 2.16 billion dollars in 2007, and a 1.16 billion dollar loss in 2008.

The huge loss is due to pricing the console below its production cost. The 599 dollar price tag for the PS3 back when it first launched was significantly cheaper than the cost of producing it in the first place, and while the retail price has come down some, the losses keep piling up.

In a statement, Sony claimed "the large-scale investment required during the development and introductory period of a new gaming platform may not be fully recovered."

They went on to note that they've invested a great deal of money into R&D for the console, a sum they might not be able to recoup if the PS3 "fails to achieve such favorable market penetration."

Sony fanboys should take heart, however. Losing money on hardware is relatively common in the video game biz, as companies routinely lower prices to sell more units and thus stimulate software sales.

Sony's game division saw a 26 percent sales spike last quarter, a trend they expect will continue on the strength of strong exclusives like the recently released Metal Gear Solid 4 and the upcoming sequel Resistance 2. (Xinhua)