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The thing that will keep PS3 from doing better over the next year is momentum. Sony has lost all kinds of it, Nintendo has tons of it, and Microsoft seems to be gaining it (though that may just be a symptom of the holiday season and major game releases).

Once your momentum has shifted in this industry, it's hard to change it. Sony is right to make this price cut now, because if PS3 doesn't shift some serious units this holiday, a lot of third parties will be distancing themselves even further from PS3 in the new year.