The PS2
It costs $155 for the most basic setup (PS2 + Memory Card) or $180 for the typical Console/Memory Card/Extra Controller setup.
Sales last year, from the rumoured price cut date ~2,000,000 in the Americas and 4,730,000 worldwide.
Xbox 360 Arcade
The old cost was $280 for the basic setup and $320 for the minimum cost for the typical extra controller. This cost is far in excess of the PS2's price so its easy to place them into seperate market groupings.
The new cost is rumoured to be $200 for the basic setup and $240 with the extra wired controller. At these prices the difference is only $45/$60 depending on the loadout between the Arcade and the PS2. At these prices they could be considered to be operating in the same market.
My Reasoning
The Xbox360s market position is getting stronger with a whole range of content coming for the system; both exclusives and multiplatform and the selection for the system is getting better for both used games and new content. The price drop brings the Xbox360 Arcade into direct competition with the PS2 from a pricing perspective.
At the same time the PS2's market position is getting weaker, the sales of new software titles are getting quite low and there aren't as many new titles coming out for the system and most of the older games are falling out of print with the publishers. Even the console sales are falling with the PS2 being down 1/3rd from 150,000 worldwide last year to 100,000 this year and in the United States the sales are down from 60,000 this time last year to 40,000 - again a fall of 33%.
Conclusion
The PS2 is giving way to the Xbox360 Arcade as the number 1 budget system on the market. I believe that the PS2 will be substituted in the near future for the Xbox360 Arcade, especially prominantly in the Americas. This should be enough to swing 500,000 console sales the way of Microsoft from PS2. The effect of this substitution should be visible on the charts, if when the Arcade price cut comes into effect the sales of the PS2 fall then we know that a substution effect is taking place and that should assist in our guestimates of the complete effect. The opposite is also true as well .
Tease.
