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Product dumping (selling a product for less than it costs) is somewhat like "cheating" but, because it is so widespread, is somewhat acceptable and can easily backfire on a company ... beyond that there is nothing that is really unfair in any way.

The fact is that Microsoft's poor sales have less to do with the PS3's price reduction as they do with the fact that the XBox 360 has been on the market for 30 months and has only received a $50 (12.5%) price reduction. Historically, most consoles have seen a 25% to 33% price reduction by the time they had been on the market for 18 months, and by the time they've been on the market for 36 months they are approaching a 50% reduction in their price.