Sony is tightening down costs for the PS3- a report on the blu ray diode

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http://biz.gamedaily.com/industry/feature/?id=16056 Xbox 360 Costs Over $500 Less to Make than PS3, says iSuppli Costs may soon be coming down for Sony's PS3, but they've already come down a good deal for Microsoft's Xbox 360, which costs significantly less to make according to research firm iSuppli. Now if only that would lead to a price drop at retail...

New data from the researchers at iSuppli (as reported in Digitimes) indicates that the production cost of the PS3 could be brought down by $100 thanks to the falling prices and increased manufacturing capabilities for blue laser diodes. This aligns with what GameDaily BIZ previously reported last month.     At the moment, however, iSuppli's estimates would suggest that the PS3 continues to be enormously expensive for Sony, while costs for Microsoft's Xbox 360 components are coming down. Main components in the PS3, including the motherboard, CPU, graphics processor, and chipset, total $352 compared to just $204 for the 360. Furthermore, the optical drive in the PS3 (a Blu-ray player) costs $125 compared to just $19.45 for the DVD drive in the 360.   Overall, PS3's total cost weighs in at $840.35 compared to a retail price of $599. Interestingly, the side-by-side chart lists a retail price of $399 for Xbox 360 Elite with a total cost of $323.30. Either it's supposed to be a retail price of $479 or the name should read Xbox 360 Pro. The hard disc drive is listed at $43, less than the $54 for the 60GB drive in the PS3. This would lead us to believe that the $43 is for the standard 20GB and not the 120GB found in the Xbox 360 Elite.   Regardless, it's a great sign for Microsoft if iSuppli's analysis is correct. Assuming iSuppli is referring to the 360 Pro, MS is profiting almost $77 on each Xbox 360 sold. And if the $323 is the cost of the Elite, then the profit is even higher of course. This news comes only a few days after Xbox executive Robbie Bach proclaimed that the Xbox 360 would become a profitable business next year.

 

I really think Microsoft is waiting to clear inventory with Halo 3 for a price drop.  Sony I think, is aware that Microsoft will clear inventory before the price drop, so it will try to reduce the costs without reducing the price for consumers this year.  That means when 360 drops say..$100 in early 2008 (I would guess early March or in May), PS3 will be in a position to follow suit.  Nintendo, can essentially drop price whenever it wants by cutting out Wii Sports.  By 2008, Wii (sold w/o Wii Sports) probably could sell at $150-$180 and still make a profit on each unit sold.

Edit: Gamedaily put out an update saying the cost information is from the November 2006, which means labelling it 'Xbox 360' elite was a mistake.  PS3 and 360 have likely dropped in price significantly, although no one seems to know what the Elite costs to make...