Remember people, if they are taking say a $70 margin on a console if they cut the price they'd only make a $20 margin and the increase in console sales will not offset the loss in margins on the hardware. Furthermore the cheaper the price the less each gamer who was unwilling to buy at a higher price is likely to be buying full priced $60 games and instead they may be more reliant on classic hits and used titles. When was the last time a console maker posted a much greater profit when they cut the price of their console? As for a $199 PS3? Sheesh do people really want Sony to never post a profit, even if they 'plan' for 10 years these are the years where they are supposed to be making a profit in order to fund the very expensive development of a next generation PS3.
Tease.
