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HappySqurriel said:

Sony reducing the manufacturing cost of the PS3 does not necessarily mean that they will reduce the price of the system ...

I really don't know what Sony's plan is, but I'm reasonably sure that they initially intended to reduce the price of the system along side manufacturing cost reductions in order to maintain their per unit losses. On top of that I'm certain that Sony (Microsoft and Nintendo) do not want to reduce the price of their systems too early or too often because that will build an expectation of future price cuts.


 No, but since they have reduced the price of the ultra-successful PS2, reducing the price of the admittedly sluggish performing PS3 will make a price cut that much more likely. 

 Secondly, Sony knew that once the high def DVD's came into popularity, the price of that would decrease.  As the cell becomes outdated, rather than a really nice peice of hardware that it is today, then the price to make it will go down.