Sony's CFO said PS3 production costs have decreased roughly 70% from launch... a lot of people have used this to conclude the Slim will be sold at a profit at $299.

Is that really the case? I don't think so... Sony does their accounting in Yen, so it's quite likely that the 70% cost reduction refers to the production cost in Yen. So we have the Slim PS3 costing 70% less Yen than the launch PS3 to produce.

On the other hand, what happened on the revenue side? At launch, the PS3 cost $599 and 599 € (the latter including VAT), which back then corresponded to 70,000 yen and 77,000 yen respectively. It's safe to assume that production costs were quite a lot higher, since they were selling at a significant loss.

Right now, at a price of $299 and 299 €, Sony gets 28,000 yen and 33,600 yen respectively.

This means the price has decreased around 60% since launch, while production costs have decreased 70%... the price has decreased almost as much as the production cost, which means Sony is losing less money than at launch, but not by a huge margin, and probably not by a big enough margin to make the PS3 hardware profitable yet (as they were losing obscene amounts of money at launch).

Unfortunately, with Sony mixing up the VAIO and Walkman businesses with SCE, it gets harder and harder to tell how profitable the PS3 business as a whole will be in the future.

edit - I forgot to include the sources for the historical exchange rates:

http://finance.yahoo.com/q/bc?s=EURJPY=X&t=5y

http://finance.yahoo.com/q/bc?s=USDJPY=X&t=5y

I still think the slim would still sell at $399.99.

They already said the PS Brand as a whole if profitable...maybe not system itself...but the Brand yes

When did they say that?

http://electronictheatre.co.uk/index.php/playstation3/playstation3-news/2765-sony-confirms-playstation-3-official-uk-rrp

70% less yen is 70% less American dollars.. did you seriously think there was a difference?

That's pretty weird considering financial reports have been suggesting otherwise.

You probably missed that ? http://news.vgchartz.com/news.php?id=4801

Seriously past this point it doesnt really matter that PS3 is loosing cash as the brand is makin up for that lost its fine....and not to mention SONY also said it needs to sell 13mil PS3 to finally be profitable and it will sell at least 7-9 mill before the year is up

Another drunk analyst!