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Um... what? The reason nobody thinks of this is because even if this were a factor, it wouldn't matter. You didn't explain how Sony would be able to offset the costs of a $100 price cut, at all.

"The added sales from a price drop would cause more software sales and therefore more royalities thereby offsetting the price cut."

Why don't they give it out for free then? Seriously, you've got to put numbers up here, otherwise it doesn't work.