All the processors in the PS4 costs around $121. The APU alone probably cost them around $100 of that amount. That APU as it stands probably costs AMD less than $20 to make and are being sold (for now) at a $80 profit.
They have arrangements; like milestones. So Sony may be paying AMD a fixed amount for the first 20M APUs, then after that, as per contract, the next 30M APUs would be a different lower price. Thats kinda how stuff like that works and something Nvidia doesn't do too well which is why everyone kinda tries to avoid having to deal with nvidia.
Besides, the APU, there are many other areas that can bring costs down. Take the RAM. THe PS4s RAM cost them $88 right now. But those terms were made at a time when the GDDR5 ram modules sony were trying to use weren't even a mass market item yet. As time goes on and with more and more GPUs coming with larger memory sizes, costs of those will also go down too. By this time next year sony could very well be paying like half of what they pay right now for it.
Lastly, they don't really have a choice. By the middle of next year while we may not see a direct price drop, we will see soft price drops. Think destiny PS4 bundle @$399 which would kinda mean a $50 price drop from what it will sell for now. By the fall of 2015 we would have flat out price drops to $299 with no bundled in games. And around 2016 we will see another soft price drop and a full drop again in 2017. By 2017 I expect these consoles to be around $199-$249.
Especially if someone is doing much much better that the other, the loser will be more aggressive with price drops forcing the winning platform to respond in kind. This couldn't happen with the PS3/360 gen cause the PS3 was $200+ more expensive than the 360 right outta the gate.
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