Sony cant cut the price

[Millennium]

whatever said:
Did anyone here not learn the concept of economies of scale? If Sony starts producing more PS3's, the cost per each console will go down.

What you're suggesting is, essentially, bulk discounting, and this is not a continuous thing: there are discrete points where the cost per console goes down. Furthermore, to get such a benefit,Sony would have to make more consoles then they currently do, and at the current rates the PS3 fails to sell out except during the holiday season. Even with a $100 price cut, Sony would lose $300 on every console that doesn't get sold, and no economy of scale can nullify that. The PS3's failure to thrive at its current price point makes the risks here very real, and it is unfair to blame Sony for fearing that.

Second, economies of scale do not work instantaneously. It takes time to derive any benefit from them. Until that happens, Sony would be losing money, even on machines that do get sold, as for their current manufacturing rates. Is Sony truly in a position to survive those losses for long enough that the benefit has time to kick in? I don't think so, and Sony appears to agree with me.