drkohler said: Note that the 40G Model is about production batch number 4 or 5. I estimate the production costs of a 40G model to around $380 (-10%/+5%, depending on certain assumptions).

I have the feeling that the upcoming financial report from Sony might prove you wrong. In their last financial conference, they said they were expecting to break even on hardware "later rather than sooner", and that it was not certain it would happen in this fiscal year (ending March 2008). We're many months away from that.

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

“The removal of the negative margin will be when all of these factors have come out. Maybe, marginally, we could achieve this during this year,” Oneda told a Citigroup Securities analyst during a Q&A session. Oneda still couldn’t specify exactly when this break-even point may happen.

 

It will be interesting to see how things turn out for Sony

NJ5 said: drkohler said: Note that the 40G Model is about production batch number 4 or 5. I estimate the production costs of a 40G model to around $380 (-10%/+5%, depending on certain assumptions). I have the feeling that the upcoming financial report from Sony might prove you wrong. In their last financial conference, they said they were expecting to break even on hardware "later rather than sooner", and that it was not certain it would happen in this fiscal year (ending March 2008). We're many months away from that.

Of course this year's financial report will be red all over in the computer entertainment department. Sony is _still_ selling some 2nd and most of 3rd batch PS3s (even 1st generation 20G units are still around) which have a book  production value around $840 and $620 (or were inventorised at $840 in last year's report) and are now firesaled at $499. Actually the red would be even redder than last year's report if it were not for the sale of the chip factories which will add $800 mio to the report sheets.

 

DMeisterJ said: The point of taking away features and lowering the price was so that people who couldn't afford one, now could.

 It's more like, so people who had decided the PS3 was too expensive would now decide to buy one, and then go to the store and see that there's no $400 model and an extra $100 once you've already decided to buy something isn't so bad.  It's exactly the same bait-and-switch they used when they launched with the 20gb and 60gb models.  And that worked exactly the same way too -- don't make hardly any 20gb models so that everyone is forced to buy the 60gb ones.

DKII said: DMeisterJ said: The point of taking away features and lowering the price was so that people who couldn't afford one, now could.  It's more like, so people who had decided the PS3 was too expensive would now decide to buy one, and then go to the store and see that there's no $400 model and an extra $100 once you've already decided to buy something isn't so bad.  It's exactly the same bait-and-switch they used when they launched with the 20gb and 60gb models.  And that worked exactly the same way too -- don't make hardly any 20gb models so that everyone is forced to buy the 60gb ones.

Wow, Sony bashing at it's best.  I don't even care anymore.  There is no point even trying to remotely see both sides of the fence or try to even explain things to you people.  They come out with this new system at a lower price point so people who couldn't afford one could now and instead of people being happy they're complaining about the lack of b/c which does/doesn't matter (I'm not arguing about that), or the lack of two USB ports, or now that they're "forcing" you to buy a more expensive console.  Even if they are "forcing" you to buy the 500 GB one w/motorstorm, that is still a nice deal if you care about b/c that much.  Also, we're basing all of this off of a source.  Who knows how many 40 GB systems would be out there?  It doesn't come out for another 2 weeks (In the states anyway) and we're already bashing them.  It doesn't matter if it was $.25 and the 360 and Wii were $10,000.  The PS3 would still cost too much.  No matter what Sony does, people here will not give them the benefit of the doubt so I am done defending sony.  :)

fkusumot said: Hadn't seen this before. Strange observation: “This will be a marketing splash as much as anything else,” said one source. “It will get their name out there and show [consumers] that they are competitive with the other players. Inventory will be constrained, but [if customers can’t find the $399 PS3], maybe they’ll pay extra for another model.” http://www.videobusiness.com/article/CA6488196.html?desc=topstory

 Sony's problem is that they think people have as much money as they do and that $400-$600 is nothing.  To a good 95%+ of people, money matters and they can't decide on a whim to pay another $100+ dollars for little Timmy's present.

They would just use those $400 and buy a 360 with a game. Seriously though they said the 60 gig would be sold out within the month. They keep on making bold predictions that keep turning out to be false. Who knows maybe this one will work out as eventually you have to get something right.

DMeisterJ said: It doesn't matter if it was $.25 and the 360 and Wii were $10,000. The PS3 would still cost too much. No matter what Sony does, people here will not give them the benefit of the doubt so I am done defending sony. :)

Sony needs to make their actions worth defending.

When was the last time you seriously looked at a Sony move in the industry and said "Wow, that's brilliant?"

There's a weird thing about this piece of news... In Europe and other PAL territories, the 40 GB is already the only available model in some countries, and it's becoming increasingly hard to find in some other ones, as can be seen in this thread. So supply of the 40 GB model must be strong in those places, otherwise PS3's sales will suffer.

The apparent weirdness is probably explained by SCEA and SCEE having quite different strategies.

 

The problem about this news is, that is isn't just trustworthy. I call BS on that thing. As other laid out, the "hidden" strategy is just nonsense and wouldn't help.