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Xbox 360 and Nintendo Wii will be at $199 within 1 year.

For Xbox 360, thats $279 down to $199, ($80 price drop for 1 year).
For the Wii, its $249 to $199 (down $50 for the first time, by then, 2 years...in fact, they would already be there, except for being sold out, there is no need).

If Sony cannot match that in ONE YEAR, then Sony won't be the mainstream system.

If they cannot be in 2 years...well, still its the same, they won't be mainstream. They will be profitable I think, and a solid 3rd choice.