That's the thing. The Wii pretty much disproves what you're saying, as its sales are routinely beating 360's, despite all of 360's support and clout. True, I can't think of what it is that Sony could do, but it shows that smart work and marketing can win out over money, support and big name titles. It's Kaz's job to figure out what that magic is. Now I'm not saying he's a miracle worker, but a miracle's what they need, a miracle's what Iwata and Reggie can produce (and Ken before he went batshit), and if I were Sony, I'd look for one of them, because Kaz isn't it.
Also, Halo 3 had relatively little effect on hardware sales when you consider what kind of ruckas MS were making about it. I mean, it was sold as the Second coming...Third coming...whatever. The effects were minimal and short lived, and while not helping the PS cause, weren't as damaging as we feared.
As for the price cuts, yeah, they cut the manufacturing cost, but no one in their right mind believes that Sony could cut it by the $440 required to bring the 40GB unit to break even from the 60GB unit. Frankly, IMO the best they could hope for was shaving just over $200 off (guesstimate - 40 for cell, 10 for hard drive, 40 for GPU, 80 for bluray, 10 for RAM, 40 for others). That means they're still losing almost as much now as when they launched. I mean, you're right, they've made it cheaper and they're losses aren't as astronomical as they could be (most importantly they don't have unsold inventory at $840 a pop anymore). Still, don't let others get the idea that they've got things under control, because it is still a shitstorm.
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