No actually it costs $675.00 to manufacturer them. The blue ray drive alone is $550 for sony. They are actually taking a big loss pushing the ps3 at the price they are. They are hoping to profit from the games and accessories.
Actually from what I hear even now the Ps3 is proving inferior to the xbox for one main reason.
They designed a basecode for game develpment that most of the big game manufacturers basically cant use. They will undoubtedly not be able to make as many or enough games to compete with the Wii or the Xbox 360 . The same killer hit games that come out are made using the same basecode. Since ps3's is so different the game manufactures have to rewrite the whole game using that programming language. And many of these manufactures have declined to make thier titles with ps3 support.
Basically the short amount of games that will be developed for the Ps3 will make this console just another expensive Blue Ray Player.
Due to the flaws of the designers and the people that pushed the ps3 into production this console will very doubtfully bring the profits they were hoping to achieve. Not to mention the first massive batches of ps3s have crashed or burned up costing the company millions in broken console returns.
Even today the Wii and 360 sales are stomping the ps3 into the ground.
Some fear that sony might not be able to cover thier massive losses. And they are already on the verge of financial destruction. They are loosing approximately $390.00 per unit! according to some articles.
Also there is a rumor that xbox 360 will be dropping thier prices to $199 and implimenting bundles for $400 that will include a premium 360 and Microsoft Zune.
From what I read the turnaround will be only and totally from
healthy sales of Bravia LCDs, Vaio computers and Handycam camcorders but not the playstation 3 ;
Nah companies like that will always survive, as long as they have a foothold in multiple markets one can hold the other together. I honestly dont see a huge profit market for them in the ps3 field untill they can drop the manufacturing cost of the units themselves. I dont think the games will be able to make them profit. Possbly break even. But only time can tell :D