according to Nikko citigroup sony has reduced the size and cost for both cell and RSX graphic card,,,here is the link:

http://www.engadget.com/2008/04/21/ps3-to-get-smaller-cell-and-or-rsx-chips-in-august/

So we are one step closer to the price cut,,,hey maybe another price cut in E3 like last year.

what do you think?

Earlier this year Sony announced that production costs were halved (800>400), and with this, it would mean the costs would be even less. So, it would be safe to expect a price-cut around August and maybe sooner if Microsoft jumps the gun and drops the price of their console. Also, PS3 sales are plateauing, but I wouldn't expect a console price drop to happen pre-MGS4. $100 would be the smartest price drop, but more than likely will only be $50.

I didn't see any such announcement from Sony. They did say that they're still taking a loss on each PS3 sold, so a $400 production cost is not possible.

@ NJ5 )

if the production costs of the PS3 really are $400, then Sony currently IS taking a loss - because Sony doesn't get the $400 a PS3 costs at retail

I've seen many people from retailers saying that they don't take a profit on hardware, so if there's a difference there it would be very small.

However, the important part is that Sony never announced such a thing. In fact, they're very much secretive about their production costs, the only official statement being that they're still losing money on hardware, and hope to break even in the last half of the fiscal year.

@NJ5 A quick search on Google and this is what I found: http://blogs.pcworld.com/gameon/archives/006276.html There's a link to the Business Week article with the original article. It wasn't Sony, but a Nikko Citigroup analyst named Kota Ezawa back in early January. As Lafiel said, this is only pertaining to the console itself, still leaving room for a loss when it comes to accessories and the few extras you get inside the 80GB.

@nj5

The 400 is just the console so ,when they charge 400 means they should take out shipping cost retailer's portion (which is small)which leaves them with around 300 for the console ,,so they are still losing money with $400 cost of production.

That information is directly contradicted both by Sony's declarations and the link the OP posted (which by the way is also from Nikko Citigroup, which means they're correcting a mistake in that previous statement).

A mistake or that Sony's managed to shrink the blu-ray laser and the CELL chip again. Wasn't the first CELL 90nm? Isn't the current 65nm? Isn't the next one, from the original post, to be smaller than 65nm? http://en.wikipedia.org/wiki/Cell_microprocessor First was 90nm March 2007 IBM revealed 65nm February 2008 revealed the 45nm Sony's has indeed reduced costs and come August shall reduce again.

I think sony are going with the bundles for now not a out right price cut. I think they will leave that until around the holiday time the same as last year(they cant afford 2 price cuts this year and I see the next one lasting along time). It worked out really well for them last time with a huge boost to there holiday sales that have kept them going.