Reuters is reporting that a Sony is in talks to sell its chip production facilities to Toshiba, according to "sources close to the matter." The 100 billion yen (about $870 million) deal is reportedly set to finish in a few months and will include the lines for Sony's PS3-powering Cell processor.

Does this mean Sony is giving up on its much-hyped computer-on-a-chip? Not likely -- Reuters says any deal would probably include a Sony/Toshiba joint venture to ensure a steady supply of Cells for Sony systems. The transfer of ownership would provide a cash influx for Sony and probably help Sony cut overhead costs related to staffing and upkeep at the plants.

The move isn't totally out of left field for Toshiba, which helped in the development of the Cell chip along with Sony and IBM and has expressed interest in using the Cell in non-gaming devices

Nintendo is looking to best the PS2's 38.2 million consoles sold and expects to hit the Wii-markable 35 million goal by 2012. Speaking with Bloomberg.com, Nintendo's American marketing chief George Harrison says that production has increased to meet the consistent demand for the console. Nintendo previously stated it expects to sell 14 million Wiis between April and the end of next March.

Harrison says that the company will continue to focus on the non-typical video game player market, which means don't expect to see any Wii upgrades in the near future. He says, "We're starting to see in the performance of the PS3 and Xbox 360 that that's not necessarily motivating the market the way it used to ... So we're going to start work on future technology only when we believe it's necessary.''

"Necessary" meaning profitable. Sure, the Wii may be two duct-taped Gamecubes, but it's selling strong and raising Nintendo's stock price. In other words, it knows how to print money.

[Via Gamasutra]

Hope springs again for gamers who just can't bring themselves to drop $600 on a PS3. DigiTimes reports that Sony's blue-violet laser diode manufacturing plant will increase production and this could, "according to Taiwan-based makers of game consoles and components," drop the PS3 price by $100. Now let's see if those savings are passed on to consumers. Despite what Sony says, this magical $100 reduction is being batted around due to tech upgrades in the console and other factors discussed by analysts.

The article also discusses the production cost drop of the Xbox 360. According to research firm iSuppli the cost to manufacture the Xbox 360 is now $323.30, while it profitably retails for $399. The PS3 costs $840.35 to manufacture, in its current state of production, and retails for $599. We'll have to wait to see the NPD sales data later this month to see how well the PS3 sold in April and if more fuel gets added to the price-drop fire. Although, if the PS3 had a game other than Resistance it might be selling better. Oh well, the purchase of a PS3 was an investment in the future, wasn't it? At least the PS2 is still worth every one of the 13,000 pennies it costs to purchase.

Update: DigiTimes used data from last November's iSuppli report and marked it as May data. The comparison of estimated material cost is valid for PS3 and the Xbox 360 in November of '06. Chances are production costs have declined further since. iSuppli plans to do a new cost analysis soon. [Thanks James]

Taiwan's DigiTimes is reporting today that Foxconn Precision Components is set to "begin volume production of PS3 in the second half of 2007 in order to meet strong demand in the upcoming peak season." Foxconn, Foxconn ... why does that name sound so familiar? Oh yeah, they're the company that sources said had production facilities that were "insufficient to meet persistent strong sales of the [Wii]" a few weeks ago, leading Nintendo to search for additional production partners.

So, if we're reading this right, Foxconn has enough additional capacity to meet the "strong demand" expected for the PS3, but not enough additional capacity to keep up with the "consistent strong sales" of the Wii going forward. It's a bit circumstantial, but it's enough to make us wonder just how many systems each company is planning on producing for the coming fiscal year.

Read - Foxconn ready for volume production of PS3 gaming consoles
Read - Shakeups expected in Wii and Xbox 360 supply chains

Wii production facilities and employees are in full swing, packaging up what could be your preorder right before your very eyes. Reader CluelessJoe hit us up with some sweet b-roll footage, and we added a bit of a soundtrack to help spice things up, otherwise they would look like mindless drones serving the Queen bee, "BRING ME MY WIIMOTES!"

In less than a week those cardboard boxes will be arriving at doorsteps, stores and secret headquarters throughout North America. Will you be getting down with it?

[Thanks, CluelessJoe]

Briefing.com reports (subscription only) that, according to UBS, 2 million Wii consoles were completed in Q3 (July-September) to support Nintendo's upcoming Q406 global console launch, beginning November 19th in North America. In addition, "at least 7 mln and potentially as high as 9 mln more units are in the build plan for 4Q06." The report continues, "this production ramp handily exeeds [sic] a publicly announced tgt for 6 mln units to ship by yearend"; however, Nintendo had previously announced plans to ship 6 million units by the end of their fiscal year (ending March 31, 2007) and only 4 million by the end of the calendar year. The language appears to indicate the possibility of building, if not shipping, as many as 11 million Wii consoles by the end of the calendar year!

With production exceeding expectations, why release the console so much later than many anticipated, and right on top of the PlayStation 3's November 17th launch? It all comes down to software. While Nintendo may have warehouses full of Wiis, they need a launch lineup and reliable system software to go along with all that stockpiled hardware. But Zelda has to be done ... we would have been happy with just that, promise.

There's an interesting back-and-forth discussion over at Terra Nova on the subject of gameplay and labour; as the boundaries between work and play become blurred, what are the issues and where will the trend lead?

Unless you're a pro gamer or gold farmer, playing games is unlikely to net you any real-world salary, and yet many of us log into MMOs to continue our "daily grind". A serious commitment to World of Warcraft, for example, can leave one with a raid schedule more gruelling than a day job. The boundary blurs elsewhere, too, when you carry out a complicated task in-game that you couldn't do in real life.

The difference is that by playing a game, you have control over what you do, rather than relinquishing the reins to an employer. Perhaps this will lead to higher self-employment and entrepreneurship amongst gamers--certainly worlds like Second Life let you work in-game for real cash. A warning, though--once the game becomes a job, the roles may reverse, leaving real life as the fun distraction.