It will be the other way arround. Sony will do it first :o)

Marketing and other costs are included in the "true" price of the product.  Anything related to the product like that is added to it's true cost per unit. 

I'm not sure why people are so unwilling to believe that Sony has lowered production costs so rapidly. Most/many of the parts in the PS3 were not used in anything else before and were very difficult to make because they were new. We've already seen evidence that Sony has cut costs by more than $100 on Blu-Ray diodes alone, let alone whatever other costs they have cut by improving the Cell and shrinking it as well as removing parts. Cutting $400 off the cost is pretty likely, actually, the only question is how much more can they cut it by.

Oh, and don't expect to see the results of this in the next financial report. It takes awhile for the effects of somethign like this to be felt in a company as big as Sony. The next quarterly report should make the PS3 loses look better on a per-system basis.

You can't have it both ways. You can't say on one hand Sony is constantly able to reduce the price then on the other hand say it won't show up on the earnings report. If the reductions are as big as people are claiming, it should show up in a steady improvement in earnings every quarter. 

It doesn't matter at all how big Sony is, since the earnings reports show the Games division separately. Actually, PS3's losses will not be fully shown, since the games division includes the PS2 and the PSP which should be pushing their profit a bit up (though not nearly enough to cover PS3's losses as we've seen in the past few quarters).

Either way, MS keeps making money and Sony keeps losing it.

Exactly. You can't tell me that the PS3 is nearing a breakeven point while the PS2 and PSP are making money (along with PS3 software sales bringing in revenue) and then scream "MARKETING COSTS!" when Sony posts a $500m+ loss in three months.

Yeah, Sony is spending ~$160m/month in marketing and overheard, not including the revenue generated by PS2/PSP/PS3 software.

*rolls eyes*

I'm going to laugh my ass off when Sony posts SCE's quarterly report in a few days. It might not be $500m, but it will be a lot and I'm curious to know how the fanboys will explain that huge number away while still telling us that the PS3 is going to break even any day now.

I have a preview on that:

"Well of course, after all it wasn't Sony who told us they were breaking even, just some crappy website. They'll surely be breaking even very very soon, after all everyone wants a Blu-Ray player now so they must be producing them massively already. Besides, Sony's engineers aren't stupid like Microsoft's, so they'll drive the cost down much faster than Microsoft, or even than the laws of nature allow! Do you really think that Sony didn't know the $600 price wouldn't work? They have planned every single step of what's happening in detail years ago.

You just wait. Anyway, Blu-Ray royalties will soon make Sony the richest company in the world, so this monetary loss is totally worth it. Who cares about the Playstation brand, brands were made to be damaged as a sacrifice for Blu-Ray. Blu-Ray, Blu-Ray, Blu-Ray."

To all those possibly frustrated by people's unwillingness to believe the PS3 is breaking even... Don't blame it on fanboyism because you can't blame anyone for being skeptical after wolf has been cried so many times on this issue. Sony is the master of the PR spin and it wouldn't be the first time they've had constituants and associates make public (and coincidentally "timely") claims to their benefit.