Here is a neat article all about it.

 Link: http://www.next-gen.biz/index.php?option=com_content&task=view&id=6573&Itemid=2

Sont is reducing the manufacturing costs and fast.

The big question is, at what price point are they basing the breakeven point at? $599? $499? This article is really to vague to answer that question.

I read this not to long ago and didnt post it for some reason. Though they are already making a profit(or were in europe) in some regions including australia.

They are probably basing this from somewhere between $499 and $550.....I assume that by march '08 the 60g model will be discontinued, and the price reduced again.  If they are projecting a break even by then, it would make sense to use the future projected selling price for the PS3.

Most likely the $599, as they already stated that they will be phasing out the 60GB, which they probably already stopped manufacturing.

I'm just guessing that Sony sells the 60GB PS3s to stores for about $449, which then get sold to consumers for $499. Thus, if they lose $200 selling it for $449, the manufacturing cost must be around $649.

The cost to upgrade the hard drive to 80GB will be miniscule, and since they are switching to 65nm, they will probably end up losing only a very little amount once the new SKU gets released.

So Sony will be selling the 80GB PS3s with the smaller processer chips for $549 to the stores, and $599 to consumers. The cost for them to make these will probably be around $600 at the time the SKU gets released.

This is just all my speculation.

It says they may finally be able to break even this year and it goes on to ist the products that need cost down. Hard to say but I would imagine the 80GB would be the break even console considering that is what they are producing now. Sort of makes sense clear out teh more expensive units at additional 100 dollar loss. Sell a new model at break even get the sales spike after consumers by the remaining stock from the shelves not lose money and prepe for a larger price cut next year.

I don't see MS cutting their costs until an honest permament price cut by Sony.

Cheeper HD - $10/20 less
Br diodes - from $120 to $8
Emotion/Gs - $27


"main cost-downs would have to occur in the Cell processor, RSX graphics chip and Blu-ray optical components."

one down two to go.

Sony have stated in their first quarter report that they aren't making a profit on PS3's, and that they hope to make it to break even soon.

http://www.gamasutra.com/php-bin/news_index.php?story=14849

The 80gb has to be the closest to break even. At $599, it might only lose $50 bucks. The transition from 90nm to 65nm for the CPU and GPU will cut costs a lot, 50% on both components. Is there any confirmation about transitioning these parts to 65nm?

I'm seeing a lot of speculation here with very few verifiable sources.

One thing even if they dont break even on the PS3, they just need to get it down to where PSP/PS2 profits are bigger then Ps3 loses.

SCE could be out of the red by the end of the year.