I have been saying all along that when MS decides to drop the price Sony is in big trouble.
Economically speaking, MS has had the position from day 1 but have not chosen to use it in its prime market as sales have been farily consistent. MS is dropping the price now to try to win the 3rd and 4th quarters of this year. If Sony decides to match them, they may be able to win the year in terms of console sales but will lose long term due to the hole that they continue to dig themselves.
Couple the price drop with Gears 2, Fable 2, Banjo 3 and other big announcements and Sony will find themselves in some big trouble. North America is the primary market for commerce and I fully expect and anticipate this price cut to be a critical factor for MS's success in 2008.
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