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DMeisterJ said:
It wasn't supposed to.

It was supposed to push more consoles for Microsoft, and make it the cheapest console.

It accomplished both of those things.

1) Pretty much, yep. This is more about increasing the size of the userbase and slow down the erosion of market share (with Wii sales, I'm not sure MS can actually increase market share at this point). As always, the larger user base makes the console more attractive to developers, which in turn makes it more attractive to gamers.

2) As I understand it, console sales typically take an uptick in September and October, albiet not so big as in November and December. Looking at the graph, both the Wii and 360 have roughly equal upticks, while the PS3 has held flat. This could be coincidence, or maybe as the most expensive console the PS3 is the first to feel the effects of the economic downturn. OTOH, it may be that the "extra" sales it would normally get went to the 360.