When will Sony cut price for the first time and how much?

[czecherychestnut]

Whenever TSMC gets enough capacity on their 22nm line to start manufacturing the APU at 22nm. Currently the PS4 APU is ~350mm2 which is fairly large, 22nm is roughly a 40% shrink so should bring the APU down to 210mm2, which will mean Sony gets roughly 33% more APU's out of each wafer (which is how TSMC charges for fabrication).

The APU is estimated to cost ~$100, so a 33% cost reduction brings it to ~$67. Then you get lower power consumption so the PSU can be shrunk (currently its rated to 250 W even though peak power is ~ 150W). Then Samsung is now manufacturing 1Gb GDDR5 chips which will allow Sony to reduce the memory chip count from 16 to 8 which should net them ~ 30% cost reduction (the higher capacity chips will cost more than the older ones) and the motherboard will get smaller as a result.

So you're looking at roughly $50-$80 savings from the component cost reduction alone, a reduction is packaging costs and case size enabled by the reduction in PSU and motherboard size will probably eak out another $20, so sometime this year Sony may be able to reduce the cost $100 without hitting profit. E3 or just before black friday would be the logical time to do it.

Alternatively Sony will do all of the above and keep the price at $399 because they can, though I think once XB1 makes the above shrinks MS will cut the price as soon as they can, which will force Sony's hand.