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.

Even though we've been able to keep our Xbox 360 from overheating by slapping on a Nyko Intercooler and dangling the power brick out a window, 360-lovers who can't take the heat will be happy to learn of Microsoft's plans to release a cooler-running 'box next year. Although the CPU upgrade, which takes advantage of a 65-nanometer manufacturing technique, may not be a direct response to what the company has said are only sporadic reports of overheating, the end result will be less heat dissipation due to lower power consumption. Like the current chips manufactured using 90-nanometer technology, the new CPUs will be produced by both developer IBM and OEM Chartered Semiconductor Manufacturing, and are not expected to offer significantly improved performance, to ensure compatibility with current titles.

[Via Joystiq]