We're almost at the half way point for the generation, as the markets reach saturation it becomes very difficult for an exclusive or even a bunch of exclusives to move units. There are only 111,000,0000 households in America and what 10M? In Canada so you could say by the end of this year about half of all houses have consoles. Selling a console to the next half is going to get progressively more difficult. Its going to be very difficult for any console to change the market dynamics which we see today in a declining market.
I worked out the price elasticity of the PS3 6 months prior and 6 months after the price cut of $200 Euro and $100-$150-$200 depending you you ask in America and the elasticity was -1.08 or so. Beyond this even a $100 price cut across the board with all else remaining equal will still have the PS3 under 2008 weekly sales as the long term weekly effects are probably only going to be something like 20-25% greater sales above what we see now and hardware revenues for the PS3 will remain stagnant.
Tease.
