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TheBigFatJ said:

I don't understand the point of your math. 

Right now, Sony is taking some loss on every PS3 sold. We don't know exactly how much.  You are suggesting they cut the price by $50, which would be ineffective anyway, because to the consumer the difference between $350 and $400 isn't all that much.

You think Sony can afford to lose an additional half a billion dollars per year?  On top of their mounting losses already?  Why wouldn't Sony be interested in profiting from the PS3 in your magic world or at least minimizing their losses.  From a business perspective, the PS3 has cost Sony so much already that it doesn't make sense to continue to throw money at it.

Look at the 360's sales this year compared to last year, and keep in mind that prior to the latest price drop, the Premium model was MS' best selling SKU.

Those gains happened primarily because of the $50 price drop last August.

And the ps3 DID win them a format war.  The Dark Knight is looking to be the first Blu-Ray movie to sell a million, and it's happening earlier in Blu-Ray's lifespan than it did with DVD and the Matrix.