As you all know…Sony posted a loss in their gaming division for the previous quarter and we all know that manufacturing cost is a big element.

Hopefully with this, one of two things happen. Either Sony can start posting profits and/or we will see a substantial cost reduction the price of the PS3.

If this is to be believed, a $299 PS3 will still be posting a $50 profit with each system sold!

During a conference call for overseas investors following Sony’s Q1 09 financials, Nobuyuki Oneda Sony Corp’s CEO and Executive Vice President has revealed that manufacturing costs of the PlayStation3 have dropped by 70%.

“The cost reduction since we introduced the PS3 is very substantial and this is on schedule,” Oneda-san replied when asked about manufacturing costs. “We don’t disclose how much of the PS3, specifically the cost deduction was achieved during the past two years. But that is on schedule.”

“About 70%, roughly speaking,” Oneda-san added when pressed further on the matter.

Although a precise manufacturing cost isn’t known, it’s widely believed that the PlayStation3 originally cost Sony approximately $800 (£485) per unit. In January 2008 reports surfaced that the manufacturing costs had been reduced by 50% to approximately $400 (£243). Although Sony wouldn’t elaborate on exact figures, the 70% decrease suggests that costs have come down to around $240 (£146) per unit.

The 80GB PlayStation 3 currently retails for £299.99, $399.99 (£243), and 39,980 yen (£254) in the UK, US, and Japan respectively, which suggests Sony has room to make the widely rumoured $100 price cut.

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