The games industry is going through a great period at the moment, with sales up and optimism widespread. But in hardware terms at least it seems that the Wii is going to be the only profitable console this generation. The PS3 and Xbox 360 are actually costing Sony and Microsoft heavy losses to even get them on to store shelves.
The money spent is worth it though, for Sony winning the HD war, and for Microsoft in getting yet another product into people's homes (plus it's a lot beter than wasting money buying Yahoo!).