Sony reduces production cost of PS3 35%; may lead to price cut

Sony Corp. has reduced the cost of building the PlayStation video-game console by 35 percent, part of a push to make the division profitable and possibly paving the way for a price cut next year.

The newest PS3 console costs Sony $448.73 to produce, down from $690.23, U.S.-based researcher iSuppli Corp. said Monday. The machine has 30 percent fewer parts than earlier versions, iSuppli said.

Falling costs bring Sony closer to breaking even on producing a PS3 that sells for $399 in stores, said Andrew Rassweiler, iSuppli's principal analyst who examined the console.

Sony, has been under pressure to cut the PS3's retail price to keep up with sales of the less expensive Wii by Nintendo Co. and Xbox 360 from Microsoft Corp.

"If they can get costs down, they will be in a better position to cut price," said Michael Pachter, an analyst for Wedbush Morgan Securities.