There's been much hand-wringing about the PS3's price and the fact it needed a cheap revamp ever since it launched in 2006. But here's the thing--Sony didn't drag its feet on the issue at all, especially if you look at the PS2's history.
Until yesterday, Sony's PlayStation 3 was the most expensive console on the market (that spot is now held by the Xbox 360 Elite, but probably not for long) and it was a huge clunky beast. Now it's a sprightly, skinny, quiet little number sporting a few less facilities (third party OSs for example) but also a nicely trimmed unit price: $299 for a 120GB version. It's a welcome move, it'll undoubtedly bump sales of the machine, and it's a very definite answer to the online clamor begging for something like this to happen for years.
But maybe we shouldn't have expected it quite as soon as it has arrived. Take the PS2 for example--due to manufacturing issues, so few units were released initially that it was hard to find on the shelves for months after its early 2000 debut. It was also expensive, and a much clunkier box than the previous PS1. Most of the issues to do with its price were centered on the device's revolutionary Emotion Engine chip, so incredibly complex that there were worries it could be used to steer guided missiles--the console's 128-bit encryption meant it was also briefly export-controlled under Japanese law. It took Sony until 2004 to rejig the complex hardware into a smaller box, thinner and quieter than the original, ditching some of the facilities of the older machine (mainly the internal hard drive option) to achieve a new, lower, price tag. Sony's been quietly tweaking the design ever since, simplifying the mainboard and removing unneeded facilities to shave the cost of making PS2s--it's now in revised version 17, and will cost you a scant $99.
And that's the old PlayStation 2--in comparison to which the technology that makes the PS3 work is magical. Its Cell processor is even more revolutionary, in its way, than the Emotion Engine was on the PS2--it's even powerful enough to be networked into a cheap supercomputer, and some suggest it could become the most important microprocessor invented this decade. The inclusion of a Blu-ray drive (a tech Sony also helped develop) as the PS3's main game storage system meant it was one of the first Blu-ray players on sale, and for a long time it was among the most affordable. The Cell chip and Blu-ray meant it cost Sony some $800-odd to make the first generation of PS3s, which it sold at a $250 loss per unit. Blu-ray part shortages even meant its European launch was delayed until March 2007.
And now, some two and a half years later, Sony's managed to shave 70% off the build costs for the PS3. It's revised and polished the Cell chip design, also moving it to a 45nm fab process (originally it was a 90nm, then a 65nm component) so that the chip is now 34% smaller, and eats 40% less electrical power. Now that BR has won the HD video disc war, economies of scale mean optical components for the BR drive are cheaper too. Hard drive tech also means including a 120GB drive in the PS3 Slim doesn't add much to the price (and remember it debuted with a 20GB one!). And another big saving has come by ditching the Emotion Engine chip internally, along with software support of the PS2.
Basically Sony took four years to revamp the PS2, and less than three to makeover the PS3--a much, much more complex machine. It's been a speedy, speedy process, despite what Sony's detractors may say. Hats-off to Sony's engineering team, I say.