Playstation 3 Price Drop soon?

Aren't they using a loss leader strategy? Or has the hardware prices come down so much since the adoption that they're making money on consoles now?

I don't know the details of the price, but since the original version, they've:

• Removed the Emotion Engine
• Removed the Graphics Synthesiser
• Removed 2 USB ports
• Removed the card readers
• Increased the number of Cell chips per silicon wafer
• Presumably improved the yeild from the blue laser manufacturing

Not to mention that increased volume on the Cell chip and the blue laser reduce per-part overhead cost. The PS3 definately costs a lot less now than it did at launch.

I'm not quite sure how that translates into dollars and cents, but if they do cut $100 off the price, they've GOT to be making money at this point. I'm guessing the original "we're losing money" statement was from the R&D which they had to cover.

No, from a materials and labor standpoint, they were losing money on the original machine. This has been confirmed by several independant sources that estimate such things.

TBH, I expect that if they are making money on consoles now, it's not much. The EE+GS removal can't save more than $100, since the PlayStation 2 only costs about that much; there could be glue components involved that inflated that price, but I don't remember reading about any when I looked at a teardown. You can get a nice card reader for about $30. The USB connectors cost less than $10. So for them to be making money on consoles, Cell and blue laser cost reduction and volume increases would need to reduce the cost by almost $200.

Well, if they were losing money on just parts/labor, then I guess the R&D had to be priced into the parts. If not then they were getting pummeled bad. I don't know what their cost allocation technique is, but cost allocation is why the government reports "200 dollar toilet seats" or whatever. They've allocated R&D and other indirect expenses down to each part, and inflated the cost associated to it much beyond the actual cost of that toilet seat or what have you.

You're not hearing me. Independent firms estimated the cost due only to parts and labor; they made a list of all the components and determined the price to assemble it at the current market rates. Surely the cost of developing the system is applied to game royalties.

http://www.engadget.com/2008/12/23/p...s-300-cheaper/

A good chunk of the R&D costs were from Intel's Cell processor and the blu-ray. I thought they'd developed their hardware, hence the talk about the R&D costs. The R&D is priced into the cell processor and the blu-ray drive I'm sure . I wonder if their "market rate" is with the discount sony would inevitably get from buying in such large quantities.

With all that being said, I'd assume that blu-ray drives and the cell processors have gotten quite a bit cheaper now. I don't think it'd be unreasonable to hit that $200 reduction in price between the blu-ray and the cell processor by now.

http://shopper.cnet.com/1770-5_9-0.h...q5628240023473

You can buy blu-ray players for close to 200 dollars now retail. That's $150 less than what it was at launch. I can guarantee that Sony's getting a material discount on even these prices. Although I guess the one in the ps3 could be higher quality? I can't seem to find any prices for the cell processor now though.