(A) What I MEANT was that I disagree with your assertion that a $100 price drop would help MS more than Sony. I don't think that my point (A) merited such a snarky response since I don't mention disagreeing with the central point of your post anywhere else in my response.
(B) Yes but all that stuff is "down the road" which is why I said Sony would have trouble matching IMMEDIATE price cuts. Sure they could just reopen their gaping financial wounds while dancing in a salt shower but I'm guessing they'd be reluctant. How carefully did you really read my post?
(C) So, what does that have to do with my assertion that price drops will no longer come in C-note increments?
A. Price is definitely a huge issue for the PS3, as even the Wii wouldnt be able to pull off much better numbers at $399. Also since the PS3 will be the cheapest BR player, the PS3 at $299 puts it right within the mainstream consumer media player range.
B. What im saying is that they can recover the losses later on, or even start producing and using the smaller cheaps more immediately. They would do that before they allow the PS3 to lose its momentum on price alone. Also, I doubt the production cost for both consoles is any more than $150, so the 360 doesnt have such a huge advantage.
C.They are dropping the price faster than past generations to get within that pricing range. Small $50 dull down the effects of dropping the price. It would be more likely that Sony will drop the price to $299 before $350. Then they might begin $50 price drops, but the reductions component cost will open room for much larger price cuts, which they will take.
The PS3 might not be profitable until the last 3 years or so of this cycle. They arent cutting prices to compete with the 360 as much as they are cutting prices to get within a reasonable price range. So I expect leaps not baby steps towards that goal.
