As for PS3 sales exploding at $199 that will all depend when that happens. If it happens with no apparent next gen starting than sales may increase. If it is apparent that a new generation is going to start soon then the $199 will be to late to signifigantly move PS3's.
I believe Sony will go to $249.99 before they go to $199.99. They need to spend some time selling the PS3 for a profit. 1 year from now the PS3 will not be profitable at $199.99. It should be profitable at $249.99.
Its libraries that sell systems not a single game.