A system at (approximately) $200 is inexpensive enough that it can be bought by most families, as a gift for a single person in wealthier families, and by gamers for one game. A system at (approximately) $400 is too expensive for most families outside of the holiday season, is (probably) not going to be purchased as a gift for an individual person, and requires more than one game to interest most gamers. A system at (approximately) $600 becomes (essentially) a toy for the wealthy ... most families will think twice about buying it, and gamers will wait for enough high-quality content to come out to justify the price. It isn't that complicated and you see the pattern everywhere ... How many cars on the road cost $20,000 new as compared to the number of cars that cost $40,000 or $60,000? How many people buy the $2 name brand potato chips compared to the $6 bag of organic potatochips? Certainly there are millions of people who buy the priemium items, but most people just want something that gets the job done. Edit: In North America a price drop to $400 would do wonders to selling more PS3 units but it won't cross into the mainstream until the price approaches $200 ... A risk Sony faces by dropping the price is that they could cause a price war they're unable to win.