Well, having components cost smaller than retail price doesn't grant profitability yet, but it's the most important starting point to achieve it, anyway! Chips cost should drop the fastest, plastic and metal materials for case, board and buttons should have a price oscillating with raw materials ones and the screen should drop cost quite fast, but not as fast as chips. Mass production drives costs down faster. Most probably a $50 cut could become feasible without losing money on HW after Q3 or Q4 2012, depending on how sluggish sales are before the cut. So the best option is to release some big games months before doing any cut, unless the latter be absolutely undelayable anymore.