Great idea! I think I'll start a car wash and charge $350 to wash a car (but I'll do a really good job). Then, when nobody buys from me, I'll drop the price down to $200 (still too expensive), but I'll try really hard to convince them that they want a $200 car wash, which they wouldn't have payed for in the first place, but now it's SUCH A GREAT DEAL!!! Look, 43% off!! What an AWESOME BARGAIN for a $350 car wash...
/sarcasm
It's all about what people are actually willing to pay for something, that's how the market works.
Sony could easily have developed a game system that had respectable graphics for the same price or cheaper than the X360, and a little more than the Wii. They could have made another accessable game system and maybe dominated again (or at least sold well), but they chose a different route, and we can all see how well it's paid off so far.
Ferraris are cool and can kick a Toyota's butt, but Toyotas still sell better.
