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KBG29 said:
Sony has to find some way of lowering PS3 prices and staying profitable. If PS4 does launch at a sub $400 dollar price, I think PS3 has to be at least half that price to stay viable.

PS3
-Sub 720p games with frame rate issues
-Updates/patches may take up to several minutes and require full system resources
-No multitasking capabilities
-No support for tablets and smartphones
-Limited PS Vita support

PS4
-1080P games ranging from solid 30 - 60fps
-Updates and patches happen behind the scene no interruptions
-Watch TV/Movies, video chat, game, listen to music all in an instant with multitasking capabilities
-Use your tablet or smartphone to interact with device at home or on the road
-Full PS Vita support, play any PS4 game on Vita via remote play

Who would buy a PS3 in this example for $200 when a PS4 is less than double at $350?
I think the 12GB is the perfect way for them to put out a unit at $150, and stay profitable while keeping PS3 viable. They should then team with a HDD maker to sell an HDD for $50 for those that want to add an HDD, but lack tech knowledge.

$350 is being pretty damn generous. Assuming you are correct about the price, though, the simple fact that the PS3's library is significantly larger than the PS4's and will be for several years is a good enough selling point for most people, I would say.

That being said, some form of price cuts would still be very beneficial.