http://gamepro.com/news.cfm?article_id=111849

here is an interesting article estimating the price of both system feel free to discuss

I personally think the 840 break down price of PS3 is full of it.

imagine sony able to sell their prediction of 6 million on march, I'm sure they'll aim for 9 million of june or july figure if they meet their 6 million march goal. 

 now if that 840 price tag is only production cost not include shipping,retail and all other cost before get to consumers hand, that'll be around a $300 loss per system. 

Now lets do a simple math, 9 million times $300, yea a company willing to lose 2.7 billion.  the number just dont make sense even if its a $200 lost. 

I personally think the PS3 cost 550 to 600 range to make, company love to jack up numbers, especailly when they are buying their parts from their other divisions, no one will know the true value of that item.

Sony never predicted selling 6 million by March, that number is units SHIPPED. You would have to be smoking crack to think they will sell 9 million by June.

They will sell 9 million ish by year's end probably...

I have a hard time believing even that unless they drop the price.

7 months in and they're at 3.25m units sold (roughly). That means in the next 6 months, they will have to move an additional 5.75m units to hit 9m.

Honestly, I don't see that happening, especially since their sales in Japan have all but withered up and died.

 Price drop and holiday sales.

It's definitely possible, maybe even likely, if they drop the price to $500 USD. Of course, it also depends on how MS responds to that price drop... They really have the opportunity to put the screws to Sony if they so desire.

.........Actually the poster is right. Sony already PAID for those shipped systems because they already paid the workers, bought the parts, ect, ect, ect. If the systems are not selling, they are not re-couping their costs for the parts they paid for. I don't believe the manufacturers have any sort of terms of sale that give Sony a major line of credit. But at the same time, the major question would be if the consoles are actually sold to the retailers or if they are waiting @ the factory or another area, waiting for purchase orders. If thats the case, Sony is screwed. If not, maybe they're doing somewhat better. I think Sony will have shipped around 9.0m units by year's end, and actually sell around 7.7m of them.

 Not really. These numbers are more or less the prediction of about 6 months before. That this article is no longer up to date can be seen in Microsofts statement and the mentioning of a 45nm Cell, which is no longer planned.

These nimbers were probably more or less correct, but this figure shows also why Sony always said that they don't plan a price cut in the near future.  While they were able to lower their production costs even the simple production itself generates a huge deficit and ypou have to add logistic and advertisment.

That's the main reason why I would describe the PS-3 situation uncomfortable. They had to lower their prices to a bare minimum but they are in a situation where they are doomed to win. When Microsaoft finally gets its 65nm processor they can think with some confidence about lowering their price. Sony would have to follow but with a black eye. They are more or less in the same situation the Xbox was in. While they sold games they had severe losses, while Sony finally minimised production costs with the slim line PS-2. Now Microsaoft has all rights necessary to produce a slim line console while Sony has to buy most of its parts.

If there would be only the PS-3 and the Xbox 360 Microsoft would probably have started a price war already, but with the Wii this would be a bad idea. So they switched to a more conservative approach. First lower the costs and then the prices, so they can pay their bills with a second place. For this role they have a much better cost structure than the PS-3. I would say the Xbox Elite is a clear sign for this approach. While it does not look attractive for consumers each console earns money. That's something the PS-3 can't offer at this time.    

they dont predict, they want selling 6 million by march. sony never expected demand be that low. 

there is a difference and I did say ""imagine sony"" sell their 6 million prediction, I'm sure any sane company will try ship another few million if they able to sell that 6 million shipped prediction.

but thats not my arguement, my arguement was on the cost of production.

$300 loss dont make sense if that system is targeting a sale of reaching high # like in the range of 10million by year end.  The loss will be too great to absorb.

you really think there is a company willing to take 3 billion dollar of lost that they might not able to get it back? if Sony get $15 royalty fee per a game and to break even sony have to sell 20 games with each system sold.

Its called killing 2 birds with 1 stone. they make the money back in a huge way if blu-ray wins the format war crap. and Sony has always sold there consoles for alot cheaper then it is to produce. the PS2 cost about 425 to make when it launched and Sony really didn't start making a profit on the console itself till they sold about 60million consoles. By that time the production cost came down. the whole time they were offsetting losses with game sales which we all know was incredible for the ps2. A huge company like Sony can take the 2.billion dollar hit cause they know that the price to produce the console will dramatically fall. The main 2 parts of the ps3 are already dropping in cost to produce (blu-ray and the cell) the bluray diods cost will drop buy 100 bux due to great manufacturing which works for the PS3 and standalone BR players prices to drop by years end. The cell will have the 65nm chip in PS3's by mid 2008 to reduce power drawn and cost to make. im not sure how much cheaper that will make it but im pretty sure it will cause the price drop of the ps3 in 2008 rather than this year.