LOL hahahaha. Seems a lot of people on here can not read and also need to take some kind of economics 101...
I think the OP should be the first one I can see plenty of assumptions there which are not necessarily true. If it was so clear cut that a $100 price cut would mean more profits in the end, Sony would do it.
The truth is that Sony's price cuts haven't significantly improved its competitive position. A price war is the last thing Sony wants, given that its competitors are in a much better financial position.
I also question the assumption that the PS3's biggest competitor is the PS2. Where's the evidence to prove that?
My Mario Kart Wii friend code: 2707-1866-0957