Can it actually be that bad?

[Dodece]

So I take it that nobody is arguing with the sales range I calculated. Which on the low end is actually a death sentence if the other two consoles see growth year over year. Which there is no reason to doubt. Microsoft is coming off of major price cuts, and the Wii is always outdoing itself. The PS3 could literally be evicted from the largest market if Nintendo or Microsoft make a concerted effort over coming months.

The PS3 has already been pushed below 15% in North America, and this past week the PS3 only just matched that. Further more the console derives 38% of its sales in North America which would mean a range between 44,000/66,500. Can a console such as the PS3 survive on those margins?

When I say survive I know there are technically consoles that survived on less, but is this console viable for retailers, or for Sony at those sales points. From what I understand the PS3 needs to sustain a certain level of sales for the production to even work marginally. These figures would imply a lot of negative things. Sony being forced to curtail production effectively sacrificing savings. Liquid assets once again being locked up in physical assets, and so forth.

Those numbers are very low. I am not even comfortable contemplating what the end result would be, but I see no way in which they do not seriously damage the bottom line of Sony. They either lock the console stagnant, or once again drain billions in liquidity. Either way Sony will lose more money. I guess everyone argues against a price cut in February of March, but it might actually happen, because Sony will have no other choice.

No it would not be about being competitive. The cut would be either to maintain liquidity, or to retain savings. The only other possibility is that Sony locks down the console. They curtail production, and make future price reductions within the next year totally impossible. Somewhat damned if they do, and damned if they don't.