The main problem is MS could just as easily cut 360's prices since it's been profittable for quite a while now and Nintendo could probably sell Wii's for $100 and be still be profitable at this point.

Also Wii appeals to a different audience than PS3's. Women is particular love Wii and there's nothing on PS3 (aside from Blu-ray) even with Move, to appeal to women/girls or the more casual crowd. At least nothing comparible to the vast (cheap!) library already on Wii.

All such a price cut would do in the end is lose Sony billions more.

Good luck convincing sony to take even more hits on there console after they finally are making a profit on it.

You don't take into account:

The complications with PS2 software B/C.

They're making a profit now but by how much? As far as we can tell, it's less than 10$ due to a recent comment. I move back into losing 90$+ per system... or more considering you what the PS2 chipset back...

40/60GB HDD's wouldn't save them money compared to the 160GB HDD's believe it or not. Those things aren't in mass production anymore so prices would be higher for SONY to attain them if anything.

LoL. Make Wii sweat? Can't you multiply PS3's total installed base by two and still have the Wii being#1? That ship has sailed my friend.

As for PS3/360..It may pass it next year, or it may not. 360 does seem to be falling pretty low as of late. But all consoles have.

OP seems like the type of person that loves to undersell and grind all day...unfortunately in the real world grinding isn't as popular.

I don't understand why so many people bring this faulty logic.

1. If one company reduces price the others will to, thus reducing any big change in power.

B. Reducing price only allows you to sell to the next group of consumers on the price tree.

In the end a $100-150 Wii/360 Core would sell just as good, if not better than a $200 PS3/360 Elite. There would be no major shift in sell through. Realistically, PS3 was always slowly gaining on the 360 as it always sold more when launches were aligned. And that aligned gap is increase as the prices become lower as people can now afford a PS3 in the mainstream. PS3's price altered its normal curve a little, but it will also die down quicker as 2011 rolls around and new consoles are mentioned and released in 2012.

The Wii however, is unchanged and is simply following a normal life cycle curve.

producing more accessible software that appeal to people who aren't playing games is the only way PS3 will ever make the Wii sweat. It is possible but I just don't know that it's plausible. Not many of Sony's studios seem that great at making games outside the very regular games box.

Yeah i agree the Wii and the PS3/360 arnt in direct competition so Nintendo wont sweat as Sony catch up. M$ could cut the price, but i've just heard Natal is going to be over £100/ over $100 but dont know by how much. so 360 will likely decline the same as it is now if bundled with Natal. 

The way things are going now i see M$ sales decreasing and WW PS3 sales above 360 within the next year. GT5 especailly will be important, and i dont see the grandmas and girlfriends Natal and Move are aimed at to be interested in them, so its really down to a 360 price cut/slim which could retake some ground. but then again PS3 exclusives and advertising have been immense this year so its a very tough climb for M$ even with a price cut/slim bundle.