Two things mean a price cut is not only a possibility in 2009, but an inevitability.

- Cuts to manufacturing costs. The change to 45nm cell is rumored to drop up to 35% of its current market price. Factor then approx $80 drop in PS3 costs including savings to be made on BR diode and XDR ram as the year progresses.

- Increased revenue streams for the PS3 outside of hardware and standard software. The video store is yet to open in Europe - their largest install base. The rumored music store may be coming soon to both territories. The VidZone service will be popular and it will contain in-app advertising revenue. Home will increase in popularity as they start to flesh it out providing strong revenues in all territories.

Add this to the increased PS3 SW sales, increased PSN revenues (due to mainly rising game costs...grrr...) and increased PSP HW/SW sales and I think that we will see MINIMUM $100 cut in the next 12 months, possibly more.

Nice, but I'm not sure about your assumptions.

You're assuming the PS3 isn't losing money now, which I don't think is the case (but we'll probably know on Thursday). I'm also not sure about the cost decrease assumption.

I believe the production cost is more like $425. And why would everyone buy a controller, two first party games and six third party games?

Does Tim agree with you?

As for the cost, the numbers stay the same whether the PS3 costs $400 or $300 its just the profit/loss which changes. Accounted for all the changes in revenue, not the change from profit to loss.

The cost decrease assumption is based on the fact that shipping 10 PS3s to a store or 15 PS3s costs about the same and keeping the factories at the ideal capacity is cheaper per unit than producing them at below or above the optimal rate.

The only issues are probably the quantity of money a PS3 makes in its lifetime and whether they need profit now or later. Since any profit not made may as well be called a loss in the overall Sony scheme of things, they would pay quite a price on any debt they acrue due to their bond status which is something to keep in mind.

@Kantor: You're not believing in the PS3? Well fine! I have to restrain Tim from hitting you, and its not a nice feeling getting in between the two of you.

But who knows how much the PS3 costs? Do you take production, end consumer costs, where do you put PSN costs or administrative costs? Its quite a mess really, and depending on how you look at it you'll get different answers.

Squilliam said: Tim is a nameless person on this forum who I gave a name to. Oh and thanks!

I see,he should be Vgchartz´s new mascot.

ctk495 said: Squilliam said: Tim is a nameless person on this forum who I gave a name to. Oh and thanks! I see,he should be Vgchartz´s new mascot.

Oh he is, hes definately the mascot.

Nice points. One problem i see is the following. If Sony could do this and increase profits, why aren't they doing it right now? Or did it before that?

Sony needs extra income and more Blu-Ray market penetration like plants need water. Why lose more money for no good reason? That question puts some doubt on your points.

For some reason these events are typically done towards the end of the year, likely because people buy more games/accessories at that time. Also If their competition cuts the price and they don't their sales will fall, but their competition is likely going to do its price cut towards the end of the year so they will have to match it then and there.