| Dark Chaos said: So much for the $299 price many want this year. At most SONY will reduce the price by $50 during the holiday season which will be followed by MS cutting the price of the 360 by ($30-$50) |
Not at all. Sony could easily afford a $100 price drop before the holiday season without posting a significant loss, if any at all. Sony will be implementing the new significantly cheaper 45nm Cell processors along with smaller, cheaper heatsinks and other releated components in March. With that, the PS3 will almost definitely be profitible. They'll most likely followup with the 45nm RSX later this year along with overall smaller and cheaper parts. You also need to keep in mind that other parts such as the Blu-ray components are constantly getting cheaper to manufacture as well.
Going off of iSupply's estimates, one 60GB PS3 cost Sony $840 to manuafacture back when the system launched in 2006. Two years later, iSupply estimates that one 80GB PS3 costs Sony about $450 to manufacture. That's a difference of almost $400 in only two years. If we were to average that to $200 in production cost per year, then that puts the PS3's rough manufacturing cost at around $255 by October 2009. However, this line of thinking is extremely flawed because it has to be taken into account that Sony has already taken the most effective and obvious steps to reduce the console's price. (PS2 chips/2 USB ports) To find a middle ground, let's just half the estimate and say that, over the next year, Sony will only be able to reduce the console's manufacturing cost by 1/4th what they have done over the last two years. In which case, the PS3 would be in the ballpark range of costing $350 to manufacture by October this year. That's more than close enough to afford a $100 price drop if they issue it during the lucrative Christmas season, because they could easily make up the $50 loss on every system sold through the huge increase in software sales that it would spur.
