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Microsoft's biggest problem will soon be Sony's biggest problem ... there really isn't that many people who are willing to spend more than $300 on a gaming system.

In the last generation over 75% of all videogame systems were bought for under $200, the market has (possibly) shifted to be willing to accept a higher price point but it is unlikely that more than 20% of gamers would be willing to spend more than $300 on a gaming system. Microsoft is in a fairly good position though because they can (probably) afford to provide the price reduction that they should have earlier this year, and offer a $250 to $300 XBox 360 priemium.