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mrstickball said:
Rpruett - Do you think that Sony can reduce it's price to $200 anytime soon? If the system costs roughly $400 to produce right now, we're looking at the PS3 reducing it's price by $300, or 42% in 2 years. If Sony continues at that rate, the PS3 will still be $230 to produce in November 2010. Do you really think that a $250 PS3 is going to set the world ablaze? Especially given the fact the 360/Wii should be at $150 or so by then?

By the time that the PS3 hits $200, and Sony isn't losing any money, next-gen systems will be out, and any sales the PS3 gets then will be just about moot.

Well first of all,  I believe that this generation will last longer than the previous ones did.  Simply because the competition is close.  The HD consoles are neck and neck with the Wii and neither 360 or PS3 is really pulling away with anything just yet.  Stark contrast to previous generations where there was a clear cut software dominating, userbase dominating platform.

 

Secondly,   The PS3 has already proven through sales in the past.  That consumers perceive the PS3 as a 'better' product. (Before all Xbox fans jump down my throat with that comment let me explain).  Consumers perceive the PS3 as a product more worthy of a higher price tag than the Xbox 360.   When Sony slashed the price of the PS3 last year (And it outsold the 360 WW on a weekly basis and for what 8 months?) .   The market IMHO has been established.   Consumers view the PS3 as a worthy investment if it's UNDER $200 more expensive than the Xbox 360. 

It wasn't until Microsoft reclaimed that 200$ cheaper price point again,  that it has out sold the PS3 on a weekly/monthly basis. 

The point is,  if Sony can get the PS3 down to 300 or 350$ it will sell very well in comparison to the 360. Now I'm sure this will spark Microsoft to dropping their consoles price to keep the stranglehold on marketshare. The only thing is, Microsoft doesn't have much of a floor left to drop their price further.  I would say 100$ is about as cheap as you will see the 360 (Or any of the consoles for that matter).  The key for Sony is trying to maintain a sub 200$ difference in price.   As long as Sony keeps pumping out quality games and keeps developer support,  it will be viewed as a viable console worthy of the cost and the sales for it will not die out in the same way that other systems have done (GC/Xbox/etc).   I believe this generation is a pretty unique one in many ways.