Selling at a loss does not mean the price is acceptable by general customers. A Porsche sports car with all latest technologies and polish does cost a lot. If they sell it to us at US$100000, they are selling at a loss. But if general customers cannot see its value (i.e. will not/unable to spend $100000 for a car), they still will not buy it.
That's because the product is bad, not because of the price. For the product, the price is great.
I don't agree with this. As a consumer. I don't care how much money (or not) Sony are making on the hardware. When I look at the base price and see that it's nearly £100 more then a 3DS and more expensive then a brand new PS3 bundle complete with a game then yeah, it's 100% a pricing issue.
Your problem, then, is with the product, not the pricing. Since this seems to be confusing people, I will use an extreme example to clarify further. If I make a Car that costs 10 Billion dollars to make, and then sell that Car for 1 Million dollars -- and nobody buys it -- is the problem the price, or is the problem the car?
The problem is the car. The price (a 9 Billion, 999 Million dollar loss per unit) is not the issue.