They'll do fine as long as the stream of new games keep coming.

Not all games have to be motion controlled.

Good points there, and I'm trying to find the sources of those numbers.

But you're wrong about one thing that might (partially?) explain the discrepancy: the RSX designed by nVidia is manufactured by Toshiba and they are the ones in agreement with Sony for the fabrication of the GPU chips. It was initially a joint venture, but I found something about Sony selling their facility in Oita to Toshiba at a later point. In any case we can assume that savings in fabrication will directly affect the costs on Sony's part.

The upper cost cut might be with the 45nm Cells from IBM plants and if Toshiba also manages a cheaper fabrication of the RSX/ smaller package and coolers. There was a piece of info about a Nikkei report speculating that in 2007, but more recent news here.

That is true. I didn't know that also RSX manufacturing was done by Sony and sold to Toshiba. On the other hand RSX wasn't even close as expensive part as Cell and Toshiba (Sony) propably pay licensing fee to NVidia every chip what is produced, so 45 nm technology doesn't give so big savings for RSX as it gives for Cell processor.

Also you should notice that Toshiba did put up new factory for 45 and 40 nm chip production and that did cost them a lot of money, so it's quite unlikely that Toshiba would put all cost reductions to Cell and RSX prices. Even in best case scenario Sony could drop PS3 manufacturing cost about 80 to 90 $ when they change they chips to 45 nm technology, but that 150$ is impossible without any other cuts (much depends on Blu-Ray component prices).

I don't see where is the PS3 retail price. I only see %.

And I belong to that group of hundreds of people who don't trust wallmart people. Usually they know as much about gaming as my grandma ;)

Like claiming PS3 is gonna drop is price since xmas 09. 

And a response for everyone above in general:

The Sony might have a trashy profit on their entire entertainment division, because it includes the console itself, acessories, games and Blu Ray movies.

But the PS3 moves astonishing losses for Sony. That's a no brainer.

what i was gonna say.. pretty much.

Sony is dooooooomed, I want that to happen !!

No seriously, yet another fanboy doom thread we don't need. If Sony is doomed then why is every exclusive released on PS3 now and nothing major released on 360 ? Why are lead platforms on PS3? Why do publishers make more money on PS3 than on 360 ? Why does it sell the same as 360 worldwide while costing twice as much ? Why did it sell more then the 360 from launch in the same time frame ? Err, I don't know.

NO seriously, yet another sony fanboy we don't need.

Anyway

OT: I don't think motion controls is the way to go with Sony. With the PS3 (I assume) still making a loss, Sony doesn't need a potentially fatal added cost.

By using motion controls, sony would have to develop the technology (or buy the rights from someone else) if they haven't done so already. That'll cost money that it can't really afford to spend right now. On top of that, they have to bank on it being a success, I for one am not buying an add-on that I really don't want for the PS3, I'm happy with the PS3's gameplay style right now. I'm sure there are others that feel the same (and those that feel differently).

Aside from developing or buying motion controls, Sony will also lose money through production of these add-ons and advertising (this thing isn't getting off the ground unless people know about it).

On top of that, we have to consider that it's obviously going to cost more than the Wii. Recent history shows us that a lot of the time, the masses don't like imitations more than the original, particularly if they are higher (Apple is a big example of this. There's better MP3 players than Ipods and better phones than Iphones, even the copies of both, but they still continue to dominate their markets and be popular).

I think Sony should push what they've got right now and adding motion controls would actually kill the PS3 (who's being doing quite well recently, those AAA games will eventually translate as being more bang for buck than the 360's recent offerings, hopefully pushing hardware)

@OP
Read the definition of that percentage in the mark-up thread. If 2.8% is the margin for the retailer, it means that Sony is selling it at about $390, not at the $150 you ventured.

That would mean about $50 lost on each hardware sale, that with a tie ratio of 5+ is easily recovered in software licenses after some time. Accessories just add a few more dollars. Basically right now the PS3 line -considered by itself- is probably starting to bring very small profits.

I read somewhere that the main reason sony even released the 160gb ps3 was  to generate profit. I would not be suprised if in fact the 160gb PS3 is making sony money. Then again we would have to wait for SCE's financial results.