PS3 profitable before price cut

[jjseth]

FishyJoe said:

That's not exactly what Tretton said. You also have to factor in that he's putting the best possible spin he can. Do you really think he is going to say that they lost billions of dollars for a product that is still losing gobs money?

And didn't they just say two days ago they weren't planning a price cut?

 Why in the world would they admit to the price cut before it happened?  If you bought anything, such as a car, and a week later they slashed prices and knew about it, why would they want to share that information with someone who wants to buy one today?

 There are many ways that they could have cut costs besides the Blu-Ray diode becoming less expensive.  Cell manufacturing could have improved greatly with fewer chips that would not pass testing/QC.  They did remove the EE from the new versions being made as well, and they haven't had the repair issues that MS has had with the 360.  They could have also reduced costs for manufacturing the boards and circuits that go on the ps3 as well.  It's most likely a combination of many things that helped reduce costs and make it profitable quickly.  When a device is $600 retail, and initial costs from the production of that was in the neighborhood of $800 (As we were told or heard somewhere), it has alot of room to go down quickly.  Simple production fixes will shave off quite a bit on the price, as well as manufacturing components done in-house will also reduce costs rather quickly instead of being dependant on a critical piece that a 3rd party may charge 2-3x's the cost for them to manufacture the piece. 

 It is hard to believe from all of what we have heard about the PS3, but I know with how quickly technology and production advances that they could get rather large chunks cut off the cost of manufacturing fast.  Just as when you see other pieces of electronics that come out that are cutting edge, the costs of making it fall rather quickly.  You can see this specifically in computer processors as they churn them out like no tomorrow and costs are always dropping fast.