In a piece primarily focused on Blu-ray over at Business Week, a bit of scrolling led to quite the interesting tidbit: Sony has apparently been able to slash the production cost of its PlayStation 3 in half. More specifically, it was noted that the firm has been able to "shrink the PS3's chips and tweak its design," which aided in getting the cost per machine "to around $400 now, from above $800 just before it went on sale in November 2006." According to Nikko Citigroup's Kota Ezawa, the biggest culprit for such an improvement is the "reduction in the parts count." Still, we wouldn't get our hopes up for yet another price cut just yet, but at least things are moving in the right direction.

Source- http://www.engadget.com/2008/01/12/sony-cuts-playstation-3-production-cost-in-half/