Nikko Citigroup upgraded its rating on Sony this morning in anticipation of it breaking even on PS3 costs earlier than expected. At the moment, Sony sells the PS3 at a loss. The respected group of analysts is now earmarking August as the milestone month. Sony's CFO recently suggested that the move would occur in the second half of the year -- a date analysts then pegged at November. No details behind the new upbeat expectations were provided by Nikko CG. However, it's safe to assume that the PS3's break-even event will be realized by a switch to a sub-65nm cell processor, sub-90nm RSX graphics chip, or both, since the smaller chips are less-costly to manufacturer.

P.S. It's worth noting that Sony has consistently stated that the PS3 will only break-even when both the Cell and RSX chips have shrunk.

Update: Reader Yaddam205 just reminded us about the "Slim PS3" redesign rumored for release in Autumn. No guarantees but smaller, less power-hungry, and cooler running chips would certainly be at the foundation of such a rig.

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PS3 to get smaller Cell and/or RSX chips in August?