Sony’s PS3 has been a lot cheaper to manufacture lately, with the introduction of the 40 GB version, which doesn’t include backwards compatibility chips and has a 65nm version of the Cell chip. All this amounts to 50% in savings for Sony, according to Nikko Citigroup analyst Kota Ezawa, who estimates that it costs Sony $400 to manufacture the PS3, as opposed to $800 before.This year Sony can look for even cheaper console production, as Nvidia will most likely shrink the RSX GPU to 65nm, and with continuing falling hardware prices (including Blu-ray laser diodes), we should be able to see a $299 PS3 for the holiday 2008 season.