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Darc Requiem said:
 


Paragraph3: Sony is already looking at producing a 45nm chipset. They will actually be able to implement a 45nm chipset before MS as they already moved to 65nm. This will help reduce cost for the PS3 further. MS isn't giving the 360 the endless budget that the original X-box had. The 360 has to make a profit for MS.



 I doubt that Sony will be able to lower the production costs for the Cell as easy as you think. Currently it's Cells are produced by IBM, where IBM can even use defective Cells for the PS-3. But they already deniedf IBM's request if they would still be in the boat for the next cell generation.

They will have more than enough trouble to get a Cell by an independent manufacturer at the current size. And while Microsoft tries to work to cover it's cost, they will not hesitate to enter a price war with Sony to protect their market position.  But at the moment there is no need!

But if the PS-3 will follow the demand and lower the price for the PS-3 (already in the danger not to cover their loss in the whole production run of the PS-3), Microsoft will not hesitate to counter with a price drop and enter the price area for mass appeal. And they would be in a much better position.