$199 or $249 PS3 could be on the way

[dunno001]

RED53DEVILS said:

We all know that the PS2 and PSP are making profits.It was also recently reported from a Sony Vice-president that PS3 maufacturing cost were slashed 70%,so it is now costing them only $240 to manufatuaring the PS3s,link.

People keep using this as part of their argument. The problem is that we have 3 pieces of information from 2 different sources, and mathematically, they're impossible. Since 2 of the 3 numbers come from Sony, I'm more apt to believe those than the iSuppli number of $840 cost at launch. Sony's numbers are the ~70% cost reduction and the interview of a pricecut of any amount would be selling at a loss. If we use Sony's numbers, $390 (current wholesale in US) is near breakeven, if it saw a 70% cost drop, it would be $1300 to make at launch, a number far from the $840 oft cited.

Sony's financials for the first quarter aren't exactly rosy. If a $400 system cost them $250 to make, they'd be firmly in the black, unless they really let development costs spiral completely out of control without check, something that I fail to believe a company such as Sony would allow. In addition, they know there is pressure to lower the price. If this cost were accurate, Sony would have already done the price cut (effective no later than E3), and put pressure on MS to either force them to counter and enter loss territory again, or get back some of their marketshare. They'd not be holding back for nothing, no, rather, the concern is profits, something that the PS3 right now is not seeing. The PS3 is finally nearing a profitable point (or may have just entered, I assumed a zero-margin for the initial calculation), and while I could see a price drop (and resumed losses) to try to keep marketshare stable, I see absolutely no reason why they would go any lower than $299, and I'll admit that I'm skeptical of that price, even. I personally see $349 with a game included. The game costs nowhere near $50 to press, but adds that value to drive the double-bargain- a $50 price cut with a $60 game now standard. This would also put Sony very competitive pricewise to the 360 ($10 less than a pro with a game), and at only $100 more than the Wii, allows them to go for that angle also.