PS3 to do everything?

Recent stories about the PS3 (BusinessWeek article) talk about the capabilities of the upcoming console that Sony hopes will revive their consumer electronics business. The linked article asks the question, "Is Sony trying to do too much?" This is in fact a difficult question, their console sounds like it's trying to do a lot, at a low cost. Microsoft's console price and resulting money loss is well documented. If Sony sells their console for $350-$400 as expected, how much money will they lose on each console? And if people use their console as a media center and not just a gaming center, will they be able to sell enough software to make up for any losses? And furthermore, is the 1 year head start by Microsoft's Xbox 360 enough to limit sales of the new console?

Sony has a lot of questions concerning the launch of this console. I'm curious to see how things will play out.