Tretton: "We’ll do everything we can do to make our pricing relevant"

[Aprisaiden]

Well we know a price cut is coming this year, but we don't know when or how much of a cut it'll be.

With the PSP Go likely making SONY approx. ~+$50 per unit sold to retailers and assuming that SONY launches a redesigned PS3 (internally or eternally, it could just be a smaller motherboard/ 45nm CELL) i think its safe to assume PS3's manufacturing costs will fall between ~$20 and ~$70 by the time SONY announces a price cut.

ill assuming SONY makes its target for 13 million shipped PS3's and 8 million shipped post-price cut:

At a $50 price cut SONY will lose $400 million in revenue
At a $100 price cut SONY will lose $800 million in revenue

The losses from this should be offset by increased profit/revenue from PSP Go and decreased manufacturing costs for PS3. Assuming PSP Go ships 3 million to retail this fiscal year.

PSP Go profit increase will be $150 million+ (3mill x ~+$50)
At $20 decrease in manufacturing costs PS3 will save $160 million ($310 million with PSP Go)
At $45 decrease in manufacturing costs PS3 will save $360 million ($510 million with PSP Go)
At $70 decrease in manufacturing costs PS3 will save $560 million ($710 million with PSP Go)

As such i think its clear that unless SONY is able to save ~+$70 per PS3 or that PSP Go makes more money than expected SONY will go with a $50 price cut, while if PS3 costs are able to be cut by ~$70 SONY will opt for a $100 price cut. Overall of course these numbers are simply estimates which ignore software sales, accessory sales and expected losses for this fiscal year meaning that they shouldn't be taken too seriously.