NJ5 said:
However, the PS3 has lots of components, many of which had already shrunk before the PS3 was launched (not to mention the non-electronic components)... To believe the PS3 costs $299 to produce right now is pure folly, it's not even up for discussion...
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How much did it cost back in November 2006? More than 2 years passed. You can read here http://en.wikipedia.org/wiki/PlayStation_3#Sales_and_production_costs that in January 2008 cost was down to $400, so $299 now is not unlikely.
Edit: just to say it again, I own no PS' at all and I won't buy one, I'm waiting for Wii to drop under 150€ to buy it, in the meantime, 99.9% PC gaming with occasional blasts from the past with the Intellivision (not very often, now it's at my sister's).