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Bboid said:

When the console first released, the 60gb version was roughly $750-850 to produce, depending on what price they were paying for bulk parts.

Now with the cheaper parts, blu-ray diodes being far cheaper they are almost close to breaking even on the $399 pricepoint. (about $475-525 to produce now)

 

By far the largest cost of the system at launch was the blu-ray diodes and they have plummeted in price since then.

Yep, this. Also evidenced by drops in BR players price.

The next most expensive component was the Cell I think. Now that Sony is working on a 45nm Cell, due '09, expect them breaking even, and lowering their price Q2 '09.