$904,865,709

At least according to Sony CFO Oneda.

http://business.nikkeibp.co.jp/article/topics/20070524/125473/

“In regard (to the future of game business) texture is bad, it is. If 'the play station (PS) 10,000 Yen ($82) in price of 3' is reduced, the profit wobbles as much as 110,000,000,000 Yen ($904,865,709) under. Magnitude (influence) is large, is difficult to foresee”. Like this what you speak is the SONY Ooneda Noboru line CFO (the highest financial affairs patsy).

Got to love google translation. Highest financial affairs patsy indeed

Damn. So, if they cut 100 bucks off the price, they'd potentially lose another billion dollars. Worst Catch 22 situation ever.

An $82 price cut costs Sony $82 more.

That Folks, is called common sense.

The question is at what point does Sony accept more losses on the hardware by bringing the price down further in order to get more marketshare and make up losses with software sales?

If you're running a company, you need to estimate the implications of a price cut. Cut too much and you wipe out profits or worse go bankrupt. 

As bad as that sounds, and I agree that its bad, this may still be better than what may happen if they dont cut the price. If the PS3 doesnt pick up and units go unsold, that a complete loss of $599 per unsold console not to mention the ramifications of a poor selling console at the start of the next generation. That will cost them a lot more than $900 million I think.

Blu laser diods droped down to $8, emotion engine axed and 65 nano chips. Wonder how much that will save on hardware production.

This article was dated May 30, 2007. The diode prices dropped a while ago, so that number is probably already factored in. Plus reduced production levels may reduce volume discounts for components.