And unfortunately for SCE, attempts to add value in the eyes of public opinion (free PSN, Home, additional media functions, etc.) really won't win any additional converts under current circumstances, including a library with enough variety to suit most tastes.
A very sizable chunk of the current holdouts are simply waiting for a lower price, regardless of features.
$299 opens up an entirely different tier of consumers when it comes to video game consoles. $399, regardless of functionality, has always been a fairly limited niche market, typically early adopters (initial Saturn, initial Xbox360 Pro). There really isn't any precedence of a mass market console selling at $399 or above for over two years (platforms such as the 3DO and Neo Geo being very limited niche products).
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