M$ price drop in America will Sony have to respond?

[bumidan]

@ weaveworld

That's good if I make you think. Double good for making you drunk. Haha

Again, my point is that it may not necessarily be Sony that is "charging" the 50% different in equivalent price.

My main point is that IF you are the European distributor and your cost of PS3 is US$500 when you know that US distributors pay ONLY US$350 - then this situation is not sustainable.

Therefore, a portion or majority portion of the RETAIL PRICE DIFFERENCE may be due to many other factors besides just the strong Euro relative to the US$.

In my example, in Canada, TVs and other electronics generally cost 20% to 50% than in the US. Therefore a lot of people who can drive down the border sometimes go purchase big ticket items down in the US.

Canadian retailers do not pay 50% more for the same goods. The difference in retail price is partly due to the fact that:
(a) transport costs
(b) more middlemen
smaller market
(d) higher overhead costs
(e) higher taxes
(f) higher tariffs/customs duties
(g) lower purchase volumes

So I am postulating that Europe is more like Canada, because it is made up of much smaller countries (though the EU should EVENTUALLY change that, but not yet) than the US - which is just one big market.