A very small amount of people cared about the redesign. The big thing was *THE PRICE DROP*

People need to understand this. And if MS releases a 'slim' 360, it won't do much. But if they drop the price, then we're talking.

I am actually quite surprised that Sony did both ($100 price drop AND slim re-design) this early this generation. I previously believed they only needed the slim and a small price cut, or a $100 price cut, to be competitive in the market place again. Apparently the competitive and economic environments were exerting more pressure on Sony then I had estimated.

Obviously doing both has done a great job of increasing PS3 sales. I do agree however, that it is a valid point, to discuss if Sony possibly over-reacted to the market. Even if the Sony engineering wizards found a way to squeeze a small profit out of the slim (sounds unlikely, but possible) any increase in sales brought about by future Nintendo or Microsoft price cuts could lead to Sony chasing profitability and exisiting off of small margins the rest of this gen (to stay competitive price wise). Not an enviable position.

That being said, this is not a "SONY IS doomed" sentiment, but damn would I love to do a competitive analysis on Sony's position/reactions after this gen is over! Harvard Case Study material for sure!

Well, they cut the price by 50% in 3 years, when did the Ps2 drop below $150?

Looks like 2004 is when the price dropped to $150.  So again the PS3 is about a year early on that regard compared to the last 2 Sony consoles.

I think that the pressure would have made them do a minor price cut in worst case scenario but instead sony decided to go all out. It is a bit early to have a slim version at this point. However Sony's ridiculous price and high tech can also help out in the future. The can still make the manufacturing cost cheaper, drop the price a lot more than competitors, and possibly have another revision 3 or 4 years down the road (provided they are keeping the ps3 around).

If Sony hadnt done anything then the would seriously fallen behind. I think part of Sony's strategy after last year was to go all out and try to retake its place

I agree with everything but the underlined.

Since the PS3 started out so much more expensive this generation, it will end more expensive.  While the PS2 eventually reached the price of $129 at the end of its generation, the PS3 will be lucky to reach $199 simply because of the technology Sony chose to include.  If you have a 2x higher starting price you are almost guaranteed to have a 2x higher ending price.

This generation, the 360 may be able to reach $129/99 (on it's Elite SKU, obviously Arcade could get even lower if wanted/needed), but the PS3 will only be able to reach about 2x that price or ~$199.  The only way this can change is if Sony removed aspects of the PS3 hardware itself.

Think it could go as low as $150. At the rate things are going now we will see Blu ray players less 100 within 2-3 years, as well as other components being refined.

In all reality, it will stay as high as the market will bear. If people arent going to pay $200 for a 8 year old piece of tech there will be a price drop

The arcade and the core are exactly the same..... They are simply the regular SKU without a hard drive and maybe a few arcade games included. The original "Core" came with a 512mb memory card, the new Arcades come with 512mb onboard memory. Other than that and regular hardware revisions across all SKU's they are the same so I guess the Arcade should be able to drop to $99. Elite maybe $129 with a $99 price tag after the generation has ended and moved on (like PS2 did recently).

I wouldn't be shocked if there was an even slimmer PS3 released in 2011 sometime. The PS3 slim is still pretty big, although way smaller then the phat PS3.

Anyway this move was necessary. They needed to do this to lower the price to $299 to drive up the sales and make publishers happy (like activision). I think it was the perfect time for it since there was the initial price drop boost, and soon there will be the normal Christmas boost.