Four things Sony can do to turn the tide for the PS3 in 2009

[HappySqurriel]

There are only three factors that determine whether a price cut makes sense for a console:

1. How much profit is being generated by the console before the price reduction
2. How large the price reduction is
3. How large of a boost is sales is expected from the price reduction

 

Now, if a console is breaking even before the price reduction you require a 25% boost in sales to justify a $50 price reduction, or a 50% boost in sales to justify a $100 price reduction, if you're willing to accept a $200 loss for each console sale that you gained.