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

[Squilliam]

Slimebeast said:

Squilliam said:
^ Thats just the moral system, good/bad.

@Slimebeast, seriously predicting 2 years into the future is a crapshoot. You have far too many game, price and accessory variables in the mean time.

Mass market price, man. $399 has a psychological barrier even with Blu-ray.

$299 will fly off the shelves.

4 words: price elasticity of demand.

What mass market price means is that revenue falls when they lower the price (decreased effect) now price elasticity falls the closer the console gets to the optimum. Since the PS3 showed a price elasticity of roughly -1.07 therefore with a 25% cut the total sales in the longer term will likely be ~20-25% higher than they compared to say Juine this year when the sales were following a more natural curve with fewer slim/cut rumours. Especially as the market has reached the half way point in terms of sales.