Remember the news about Blu-ray diodes manufacturing price lowering down? It's finally happening and with this announcement the PS3 is more surely getting a price reduction as well this time. As, The Digitimes reports, "the production cost of the game console could be reduced by as much as US$100, according to Taiwan-based makers of game consoles and components."

Earlier last month, Wedbush Morgan Securities analyst Michael Pachter thought the same:

"Yes, it means that Sony is definitely in a position to cut price. God knows whether they will, but lower costs usually lead to lower prices. The right question to ask is whether the full bill of materials is below $499, allowing them to cut price and still avoid losing money. I'm not competent to answer whether it is, but I am competent to say that when cost is below $499, we should look for a cut to that level."

The announcement coming from Sony, in regards to the price lowering for manufacturing Blu-ray diodes says: "Sony Shiroishi Semiconductor, a wholly owned subsidiary of Sony, on April 23 announced an expansion of its monthly production capacity of blue-violet laser diodes, a key component of HD-DVD and Blu-ray Disc (BD) PUHs, to 1.7 million diodes as well as the beginning of volume production of 240mW (milliwatts) blue-violet laser diodes in November of 2007. This will greatly increase the supply of blue-laser PUHs at lower prices, the sources indicated, noting the reduction of costs could reach US$100."

Yes, but if both Xbox 360 and PS3 use these blue-violet diodes, then that means both systems will see a price reduction, right? Wrong. The 360 has an add-on device for running HD content. With Sony's PS3 it's different. You get the high definition playing device whether you like it or not.