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Viper1 said:

I arrive at the costs I did as follows:

The PS3 in Japan cost ¥59,980 at launch.  But it cost much more than that to build because of the Blu-ray drive and the CELL processor.  So Sony took a huge loss...even at ¥59,980.

If we were to remove the CELL and Blu-ray drive, they could have sold the PS3 at ¥59,980 and broke even.   Let's say the PS4 cost is like the PS3 costs only minus the expensive Blu-ray and CELL.   That would mean they could sell the PS4 in Japan for ¥59,980 and break even.  But if they did that, it would require the PS4 to be sold in the US for $766 to also break even using the current 78.6295 Yen to 1 USD exchange rate.

Does that make more sense now?

Yeah, thanks.

The problem I have is you're assuming I think the PS4 cost will be as you described.