They will be 499.99 and the reason Sony is selling them under the price they manufacture the units for is simple.... BLU RAY. Once they get the BLU RAY players into people's homes, they will begin to take and convert the DVD market into BLU RAY. Then, movie companies will have to pay them a HUGE royalty to use the BLU RAY technology OR they will have to fuse with SOny Picture Studios, meaning Sony will make billions of dollars more then the PS3 could ever make. THINK LIKE A COORPERATION. OUTSIDE THE BOX.