Don't forget about:

- VAT (which alone would make it ~470$ for Sony or less, depending on the countries)

- higher retailer margin than in USA

- EU recycling fees

@NJ5

if you look at a possible price drop so pessimistically it will obviously seem improbable

XMAS is needed for them inEU

ALSO

Kazuo Hirai seems to think Ps3 can sell 11 million by march 08 so there's something he knows that we don't

Whats the point though? They wont save any money if it has the same features with a weaker harddrive.

@leo-j

there is a very big point

I think the costs of the blu-ray diode have gone down VERY significantly

also £299 Ps3 at XMAS here will ANHILATE competition

I can vouch for that, in UK Ps3 has 1 problem, price

£299 will address that issue greatly

I think a 33%/200 € price drop before the first Christmas (and if it's done in October, less than 7 months after launch) should always look improbable no matter how optimistic one is... I wouldn't be surprised if it dropped to 499€ though, in fact I now expect that.

I would be very surprised if it dropped to 399€, but as I said, it's not impossible.

Regarding the 11 million number, according to what I've seen it's not like Sony has a history of fulfilling their forecasts... They might even reduce it in their Q2 financial report, let's wait for that and see what happens.

 I live in Finland and that doesn't seem to be explain the prices here. You can get 360 premium with around $450 here but PS3 costs $950 here (699€ to be exact). And 360 core and Wii only cost about $350 here. Actually 360 premium + HD DVD -drive cost about $150 less than PS3 here. So I don't think those things explains everything...

@Untamoi:

I know that the things I said are often used to try and explain why prices are higher in Europe, but that was not my point this time. I was just pointing out to SlorgNet why a 399€ would probably not get Sony enough money to break even on the hardware. Converting currencies is not enough, at least VAT should be considered in those calculations because it's a significant part of the console's price.

Having said that, what your post tells us is that if Sony makes such a big price cut in Finland, MAYBE they'd be close to breaking even on the hardware on Finnish sales (and maybe some other high priced countries)... but probably not in all of Europe.

PS: BTW, I live in Sweden where prices are also higher than most places in Europe. The solution is very simple... Ordering the consoles from Amazon Germany for example, or buying them when I go home (although I don't look forward to taking a big box on the plane). Hurray for EU free trade.

I was assuming 599EUR and 399EUR as a baseline, i.e. excluding VAT (which can be as high as 20% in some countries, I think - correct me if I'm wrong). But Sony has cost-reduced the heck out of the PS3, moving through at least two significant changes in the motherboard, according to Nikkei Electronics Weekly. Electronic components drop in price about 30% a year, so if the PS3 originally cost $800 to make, it shouldn't cost more than $560 to make by November. Last but not least, the Chinese yuan has fallen about 6% versus the euro over the past 12 months, so that's another cost savings for Sony (most of the PS3 is made in China) - the equivalent of 36EUR. 

A 399EUR model plus a 20% VAT and 5% fees would come out to a grand total of 499EUR, so maybe that's what European shoppers will see in October. We'll just have to see...

Now I see what the misunderstanding is ;) When people talk about European prices, they're always including VAT on them. In most (or all I think) European countries it's illegal to report prices without including VAT. So when you see 599 € (current PS3 price), that's including VAT.

VAT varies by country, but the difference is absorbed by whoever is selling/making the product if they want to have the same price in all countries.