There are several factors that reduce the cost to manufacture ...
Component costs can be reduced as new technology becomes available; the 65nm process will reduce the size of the CPU and GPU to half their current size, which reduces the materials cost per chip and the number of defective chips.
Component costs can be reduced as rarity is reduced; the Blue Laser Diode was so expensive in part because it was a rare component. As more manufactures can produce it and as current manufacturers increase their yields the cost per unit comes down.
Licencing costs often are reduced after a product hits certain milestones; as an example, Sony might pay $25 per GPU for the first 10 Million units and $18 per GPU for the next 20 Million units.
And finally, a product like the PS3 will be constantly simplified through the integration of components (combine the USB and Flash reader controllers).
