A recent study by financial analysts at Merrill Lynch Japan suggests that the PlayStation 3 may cost up to $490 dollars to manufacture, with the company predicting that Sony will launch at $399 and take a $1.18bn loss in its first year on the market.
Merrill Lynch's report is based on the assumption that the Blu-Ray drive, Cell chip and RSX graphics processor will cost around $101 each, with the remainder of the components and manufacturing costs boosting the production costs to the $490 level.
It's normal for console manufacturers to take a hit on their hardware in the early stages of a system's lifespan, and PS3 will be no different - but the analysts estimate that Sony will still roll out $100 more expensive than the Xbox 360, which is expected to be priced at roughly $299.
News source: GamesIndustry.biz
