Console component costs are the same as computer component costs. For instance, I bought a videocard for like $300 in April 2006. Now, like 15 months later, it costs like $150 for the exact same card.
Blu-ray has alot to do with the PS3 price, and that tech is constantly coming down in price. Then you add the 65 nm stuff, removing EE, and its quite possible to be $499 by november 2007 (80gig), and $349-399 by november 2008.
Of course, sony will still be LOSING money at that price, but the amount of money they lose will remain close to the same by the time they lower the price. They've dumped so much money into the PS3, they would be silly to worry about just losing a little bit of extra money. Whats worse, losing more money, or making the other money you lost count for nothin'.
