Ouch, I wonder what Microsoft is going to do this year? They may not have the funds to respond to a price cut etc.

There will likely be a price cut this year, Sony about tripled their profits last year and production costs will be further reduced.

@MikeB

I don't see the point of making a console build for the future and have it stagnate 2 year so that it doesn't cost too much.... why not release it 2 years later with all the spotlights on it?

they need to start advertising mgs4 on t.v.most 360 owners think its coming to their console but ITS NOT

@SSJ12

Even if they aren't shrinking the chips themselves they still have to redesign their mobos to take advantage of those new parts.  The costs you mention are surely taken care of, but that doesn't mean they aren't still working on new HW, not that you aren't aware of that fact.

@MikeB

That's if you bought the parts off the shelf, which Sony obviously doesn't have to do.  They get everything wholesale or make it themselves.  The iSupply number may be the best we've got to work with, but it's not perfect.  I find it unlikely that Sony paid significantly more than that to build a PS3, and I wouldn't believe it if anyone claimed a number over $900 for total production w/ labor etc. unless it was Sony themselves.  Frankly, with how they opperate, it's still possible that 60GB PS3s available at launche cost less than $800 to build.  It's not like iSupply analysis is very reliable, ya know.

This is obvious.
When Sony came out of the blue saying "Hey! We are breaking even now on every PS3 sold!"

I was like, yeah, right.

@ Hephaestos

1) Winning the HD format war, having to built a HD DVD based PS3 later on would have been bad for Sony. (Blu-Ray movie royalties, Blu-Ray technology royalties, long term technical advantages like more data per layer, scratch resistance is very beneficial to a console, better streaming technology, etc)

2) The Cell processor is radically different, its approach requires efficient game engine design. Launching years later wouldn't have pushed developers to adapt and a similar problem will be introduced 2 years later, while now developers are really starting to tap its potential. Mass production of the Cell chip now, allows for quick production cost reductions, etc.

3) HDTV sales are pushed by availability of high definition content. The PS3 is the best consumer electronics product to push HDTV sales, Blu-Ray movies and the technically most impressive high definiion games. The PS3 pushes the market and Sony as a company forward towards where they want to be in the future.

The PS3 is selling well. Just because the Nintendo Wii is a runaway success doesn't mean Sony shouldn't stick to their own roadmap for the future. I am sure they would have preferred the PS2 to sell like the Wii at this point rather than the PS3. The PS3 just has to compete well enough with the 360, giving that platform a 3 year headstart wouldn't have been a good idea, releasing a PS2.5 wouldn't have been a smart move neither looking at the long term aims for the company.

The PS3 has overtaken the 360 in Europe despite a 1 year and 5 months headstart. The PS3 dwarfs the 360's install base for Japan and lasty the PS3 is selling better in 360 strongholds like the UK, Australia and South Korea and is going head to head with the 360 battling for the US.

So... too difficult for a price cut this year

I'm not sure I agree with those Guardian numbers.
The PS2 is still making a lot of money true but lets not forget that the average price of any PS2 games has dropped a lot( it's rare to see new PS2 titles at 50$ these days) so the licence fee that Sony gets per PS2 title sold must have dropped too...

As for the PSP it's selling a lot but is Sony really making that huge of a profit per PSP sale ? Not so certain...

This was over the course of a year, of course it's gonna show a loss.

It includes sales of the 60GB and even the European launch of the PS3.