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NJ5 said:

Here is a real analysis of what a $100 price cut would cost:

http://vgchartz.com/forum/post.php?id=2164540

With some assumptions of course, but still better than not taking software into account.

Good analysis, the only problem is that Sony does not sell the console at $400, though I don't know how much they actually sell it for, so that decreases the money earnt from hardware sales