PS3 Production Cost Halved Since 2006

(andPOP) - According to Business Weekly, Sony has been able to reduce the production cost of the PS3 from $800 in November 2006 when the console launched, to $400.

"We think the biggest factor here is that simplification has become possible through a reduction in the parts count, leading to a reduction in costs," says Nikko Citigroup's Kota Ezawa in a December 27th report.

Ezawa estimates that Sony's gaming division will lose $1.4 billion compared to last years $2.1 billion and doesn't expect the division to be profitable until 2009.

With the built-in Blu-Ray player playing such a key role in the PS3?s success, sales are expected to pick up since Warner announced that it would release HD movies exclusively on Blu-Ray beginning this summer.