PS3 / X360 are down from their absolute peaks by 500,000 each so far (4.9m --> 4.4m, 7.4m --> 6.9m), Wii is down from its absolute peak by almost 7 million in the US in a 12 month period (10.9m --> 4.1m). I don't think price cuts are going to do it either - think about what the data means in absolute terms, the 21m people who bought a console in April 2008 to March 2009 has not been replicated in any year since despite all of the following demographic widening pushes across the four consoles:
A Wii price cut in September 2009, a Wii price cut in April 2011 (price fell from $250 to $200 to $150), retail discounts, new bundles
PS3 price cut / Slim launch in August / September 2009, Move in September 2010, PS3 price cut in August 2011, retail discounts, new bundles
X360 model clearance sales (various) / unending retail discounts, especially since Kinect slowed in mid-2011 / Kinect's launch & ongoing push, new bundles
PS2 price cut to $100 in April 2009, new bundles
The generation is almost over - if people were really "upgrading" to X360 / PS3 from Wii in large numbers you'd see the numbers flatlining at some point, maybe at 18m, instead of declining by almost 30% in the past three years. I actually think X360 / PS3 will be down 10-25% each this year - Sony isn't cutting by $100 - they have no money (just lost $6 billion in a year (!) ), and Microsoft isn't cutting by $100 if Sony isn't. X360 is already down by nearly 400,000 off its 2011 pace, and in % terms is trending for like a 5-5.5m year in calendar 2012, PS3 is trending for 3.5m-4.0m in calendar 2012, and Wii is trending for 3.0m -3.5m in calendar 2012. Three $50 price cuts by Fall 2012 won't do much - not when the US has bought 95 million current consoles in a time when we have only 125m households in the US. I figure there are like 60 million households that will buy one console, and 20 million that will buy two, and another 7 million that will buy all three - but we're still getting very close to full saturation even with the consoles offering additional services like playing old games (PSN, VC), TV content (Hulu, Netflix), internet, etc.
People are difficult to govern because they have too much knowledge.
When there are more laws, there are more criminals.
- Lao Tzu
