A relatively cheap PS3 Slim is inbound. Let's talk Microsoft's response.

[Fei-Hung]

I think you have to look at the bigger picture:

1) the ps3 was down played on release and the heavy price tag turned a lot of people against it. The USA maybe in favour of the 360, but last gen it was the ps2! With a slim and a price cut, how will the Market change in the USA?

2) how will stores react? I've been to many stores in the UK where sales clerks have pointed at the 360 and Wii but left out the ps3. Now at a far more competitive cost packed with more features, will retailers change their selling habits?

3) I'm sure we can agree that the highest userbase is on the ps2 and more ps2 owners have been waiting for this price drop to pick up a ps3 than pick up a 360. How will this affect sales?

4) netfix, sky, twitted etc bares no meaning. With a browser built in you can stream movies for free, access anime sites, aswell as other rental sites!

5) how will the media welcome the price drop and ps3 slim? Media create sales and so far the slim has been welcomed as it were the return of Christ!

6) how will eyepet with a cheaper ps3 change sales in regards to casual gamers? How will it affect the momentum of sales when the motion wand is released? If the trend is set, then Natal maybe D.o.A!

7) possibilty of already released games getting sales boosts- games such as heavenly sword, r&c tod, uncharted, r2, kz2 may get a boost in sales with the influx of new ps3 gamers. If the tide turns, will another halo or gears be able to make an impact as these Sony brands become stronger!

8) new digital distribution service- for books and comics will give the edge for the geeks and comic lovers. I know a bunch of comic enthusiasts that creamed their pants on hearing this info. To them, Sony is now God and the ps3 their messiah.

9) the Market is changing, people are picking up HDTVs. We are talking about now not 3 years ago where BR and HD meant nothing! BR Market is growing and the price is coming down on BR films nicely! Soon BR will be taken into consideration if it hasn't already!

10) people won't look at a games library from 3years ago, they will look at what is there to purchase now. Who wants to buy gears1 when they can buy gears2? Who wants to fnr3 when they have fnr4? Who wants to buy fifa09 when they have fifa10?

There are a lot of things in Sonys favor, but after the crap they pulled earlier, I won't be surprised if they still screw it up LOL

What can MS do? Do what they have always done this gen. Advertise better, lower the cost of HDD, controllers, live and maybe drop their price on the Elite.

What would I do if I was MS? I would drop the price of Elite slightly and bundle in Halo ODST this holiday and or Forza3. I would give vouchers to anyone purchasing a Zune HD or windows7 for a 360. Then I would pray to God the BR declines because at this rate, BR may become a needed addition and I wouldn't want to sell a BR add on or lose sales for the lack of one!

I personally think that the complete console now may have a change of luck and if Sony don't screw it up, outsell the 360 for the rest of this gen.