That was before the yen strengthened, which hurts the profits of Japanese export companies

Call me batshit insane, but I still sense a price drop a brewin :P In many articles I've read, they never mention a break even at a said price... So if they did a 100$ price drop, and had factored that into they're "break even cost" then they wouldn't technically be lying :P Granted, if they had mentioned that they expect a break even on hardware for they're $400 unit... that might be different :3

We must not forget that Sony also acquired seven hundred million dollars in debt to support the PS3 launch. They basically borrowed from a number of financial institutions. This is rarely factored into the overall analysis. So up front the PS3 has probably cost Sony four billion dollars. Without the profitable PS2, and PSP Sony has probably dropped at least five billion dollars on the PS3.

Some say Sony will have to reduce the price on their console to be competitive, but given the current market being competitive cannot be a primary concern for them. I think a price cut will only come once Sony has exhausted this current market position. Basically waiting until supply exceeds demand by two million units. At which point Sony must reduce prices to free up the capital locked into physical assets.

I do not view a price cut for Sony being a specific date, but more specifically a certain margin on a spreadsheet. They will work with what they have until it is no longer tenable, and then reduce the price.

@Comrade Tovya

I agree with you. It why, in spite knowing Sony's financial situation, I still think they need a price cut early in 2009. If the 360 starts to pull away from the PS3 significantly, you are going to see the PS3 start to get the Gamecube treatment from 3rd Party developers. You'll see the number of multiplatform releases for the PS3 decrease. Sure major titles like Madden will be released for the platform, but titles from smaller and then medium sized publishers will start fall by the way side. Once third parties start pulling support they rarely reverse course.

Thank you!  That's exactly what I am trying to say.  People act as if being in last place means nothing, but from a developers stand point, it's huge.

We could literally see the PS3 losing to the 360 by 13-million units or more by this time next year.... that's why Sony just can't wait.  I spent too much on my PS3 to see it become the fringe system.  I'm still amazed that Sony screwed this generation up so badly.  I thought they learned how to conquer after the last generation, but apparently I was wrong.

If there's anything everyone agrees on, it's that Sony has to choose between two evils... Either losing billions more on hardware price cuts or risking their relations with 3rd parties and their brand name.

It will be interesting to see what they think the lesser of two evils is (I'm betting on the latter unless Sony as a whole does better than I expect).

Doubt that would ever happen.  The difference in userbase would never be that wide.  And the high cost of developing HD games means it would always make sense to make a PS3 version even if it sells much much less than 360 version. 

i dont see how thats possible...

@NJ5

Oh absolutely. I stated earlier that they are damned if they do, damned if they don't. My guess is that they will make their decision after January. So they can see if the 360 sales taper off in comparison to the PS3 sales.

If Nintendo makes 6$ per Wii sold in North America and they made 50$ at lauch and they haven't dropped the price yet. I fail to see how the PS3 could break even in America for a long time.