Yesterday, Sony released the results of its second financial quarter, ended September 30, 2007. During that three month period, Sony spent colossal amounts of money to sell PlayStation 3 units below cost.

As gamers, you may not care about the intimate details of Sony's financials like how much the company lost on music or the minor improvements in the financial performance of its electronics business. But Sony's game unit went from an operating loss in the second quarter last year of ¥43.5 billion to an operating loss in this latest quarter of ¥96.7 billion (around $847 million or €589 million).

To what did Sony attribute that operating loss, that grew in size by ¥53.2 billion? "This deterioration was primarily due to the loss arising from the strategic pricing of PS3 at points lower than its production cost and the increase in PS3 related inventory write-downs..." In other words, that loss is primarily due to Sony pricing consoles below their own cost and aggravated by the recent PlayStation 3 price drops.