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drkohler said:

1. Current manufacturing costs for an XBox Arcade: around $240

2. Current manufacturing costs for other XBox models: around $270

3. Current manufacturing costs for a PS3: around $350

(All estimates +/- 5-10%. Any no and no again, I'm not going to tell you or any kid why I know these estimates are reasomanly close to the truth).

Now currently, the arcade sells around $210 in Europe. This value is the final sales price in all shop and includes all state and local taxes as well as shop margins (which are very likely lower than Wall-Mart's margins in the States). All this amounts to around 20-35% MS has to forfeit on the $210 price, so MS gets around $150-170 for their arcades an around $200 for their other models. this gives you a rough idea how MS is losing money. Now the price for a PS3 in Europe has a MSRP of around $540. Again this includes all taxes and shop margins. If Sony gives shop margins as low as MS, thy get around $350-$380 for their console, essentially manufacturing parity or even a slight profit.  

 

$100 PS3 price cut in March 2009 confirmed.