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So if it costs $500 to make, and Sony is breaking even selling it for $499, then retailers are making a $1 loss on the console in Europe.

I pity whoever has to convince them...

 

Edit: Expecting a component to go down from $300 currently buying off the shelf to $100 buying bulk in ~9 months time when they start manufacturing and stockpiling units for launch? Doesn't $200 seem more appropriate?