Business Weak has reported that Sony has been able to “shrink the PS3’s chips and tweak its design,” helping in getting the cost per machine down to “around $400 now, from above $800 just before it went on sale in November 2006.”

Engadget writes: According to Nikko Citigroup’s Kota Ezawa, the biggest culprit for such an improvement is the “reduction in the parts count.”

Looks like Sony is finally breaking even on the massive disappointment that has been the PS3. I think this is great. If they really want to sell PS3’s now all they have to do is cut the price in half, from the current high price of $399 to the very reasonable and attractive price of $199. That way they’re not only cheaper than the Xbox 360 at $279 for the cheapest “arcade” edition, but even cheaper than the ever popular Wii at $249. They’ll also only be losing half the money they were losing before, from $400 to $200. Win, win, I think. They get the Playstation 3 into a bunch more customer hands and solidify Blu-Ray as the dominate high definition dvd format.

I have to admit, I’ve been a little bit of a skeptic of Sony’s PS3 since they launched. However, if they did something like this (which they won’t, because they’re stupid corporate Sony) and continued to pass the savings on to the consumer, they could actually come out on top by the end of this year.

Boom!