Sony Stock Surges On Strength Of Falling PS3 Production Costs

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When a BusinessWeek report issued the good news that Sony had dramatically cut production costs on the PlayStation 3 - down over 50% - everyone stood up and took notice. At first, we only thought about the consumer, who quickly anticipated a price cut.

But let's not forget about the all-important investor. According to EndSights and a new iSuppli report, the aforementioned news has resulted in a big surge in Sony's share price. The stock gained 2.7% in yesterday's trading session on the Tokyo Stock Exchange, which surpassed the average gain of the day by 2.4%. Sony's share price is now at its highest level in two weeks, and analysts may predict that it will continue to climb. The production costs of the PS3 can only continue to decrease at this point, and with major exclusive releases on the way, sales are primed to climb. We're also holding our breath, waiting for a possible price cut announcement, despite Sony's insistence that they won't drop the price any time soon. In multiple official statements, they say they're happy with the current retail tag, which is pretty self-explanatory. Besides, even though Sony is losing less with each PS3 sold, they're still losing...even though they're not far off from turning a profit.

We'll keep you updated but just remember, although there are plenty of rumors out there right now, Sony hasn't provided anyone with a statement regarding future pricing of the PS3 hardware. You can't deny the falling production costs, though, so it's not difficult to surmise the logical next step...

12/29/2008 John Shepard

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