Is Sony really losing that much MORE money on the PS3 after price cuts?

[thx1138]

I can understand some of the reasoning that the PS3 has dropped only $100.

But as for Sony cost savings on production that isnt the case. Anyone who knows anything about component costs knows that at this point the 20GB HD is probably the most costly HD. HD costs dont drop year over year the capacity increases and manufacturers make the smaller capacity in smaller amounts causing prices to stay the same or rise. Taking a quickie look at SATA HD costs at Newegg has the difference between 40GB and 80GB at $10. Difference between 60GB and 80GB is about $1.00.

So in reality the 60GB and the 80GB PS3's really cost the same to produce. Now the 40GB also has removed some components (as did the 20GB). Still the components didnt add much to the cost to begin with. So in reality the differences in models is all marketing.

Sony originally released the 20GB as a defensive measure once the $600 price point was announced. The 20GB didnt cost anywhere close to $100 less than the PS3 to produce and Sony did not want to take a huge hit. So they produced the 20GB in very limited quantities and just advertised that PS3 starts at $500.

Now they are in a position where they need to sell consoles or they are dead so they produced the 40GB and because of situation they need it to sell. In reality it causes them to lose more than the 80GB. Yet they have no choice. The upped the storage to 80GB to hopefully convince some people to purchase the 80GB so they dont lose so much on the PS3 getting back in the race, but they are counting on the 40GB.