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Just as a thought, Microsoft could feel like they’re undercutting the Playstation Move if they sold Kinects at $150 because after someone bought the move bundle with a second controller Kinects would be cheaper; and they could believe that they were undercutting the Playstation move if they sold Kinects at $250 because after someone bought the Playstation move bundle with 3 extra controllers Kinects would still be cheaper. I could be wrong but I think Sony was probably fairly confident people were going to rush out to buy a $600 PS3 before they launched it too.

 

Basically, what a corporate official believes is a price that will make consumers happy is not necessarily a price that will make consumers happy.