wii in japan will more likely follow Apple's ipod strategy...keep at same price, just give them more for that price

so they won't drop it to $200, but instead add Wii Sports to the package

The poor performance of the PS3 allowed MS to respond to the first PS3 price cut with an average price cut of $33 ($20 on Core, $50 on Premium and $30 on the Elite).

The continued poor performance of the PS3 force Sony to reduce yet another $100 and reduce capabilities of the 40GB PS3 to get into the game the remainder of the year.

MS has lots of room to reduce yet again and this time it can be more aggressive because of the cost reductions that have taken place and continue to take place simply because of time. MS can cut the price when GTA IV and by the time Holiday 2008 comes around the 360 will still be profitable. In fact the SKU that may get the biggest bump has the added advantage of possible additional hardware sales of HDD.

Sony can of course cut prices again if they are willing to stay deep in the red, but I dont think they have any more features they can cut.

Shakes head and sighs at first post.

I think that the next price cut for ps3 and 360 could be in a year or two, my prediction, and the wii to drop to that price? they are still selling mad with the price they have now, why would they lower it O_O

Sony has more power to drop the price than microsoft. It is really simple in my opinion. First of all microsoft are already in the red because of xbox, while I think it is fair to assume sony is in the black for ps2.
secondly sony is not smaller than microsoft, so it can tolerate a few billion dollars in red if the cost is high enough, and while video games might not justify that cost, I am pretty sure that sony don't want to let microsoft get the central home enterntainment media market. That is the way I see it, it is just a fight over our living rooms between sony and microsoft. microsoft already has our bedrooms (studying room) with computers, they also want our living room. Sony is the only contender who with blu-ray and ... is trying to stop the microsoft supremecy.
That being said, I don't think we will be seeing any price drops soon, because both parties know that a price drop will only make the other counter, and both will go more into red without any good reason.

Sony has more power to drop the price than Microsoft? Don't make me laugh...

Microsoft's situation:

- lost a lot of money with the xbox
- can make that kind of money back with a single quarter of profits with their cash-cow products (Office and Windows)
- has precisely $0 in debt
- has a currently profitable console, and no money drains (the xbox was discontinued)
- so far, had a $50 drop in price on the Xbox 360
- has had the most time to drop the price of production

Sony's situation:

- keeps losing money every quarter (in the gaming division) due to the PS3. Despite the PS2 and PSP, in the past 1.5 years has lost half the money they made in the previous ten years on the gaming division.
- has about $10 billion in debt (last I checked)
- has a lot of fierce competition in every single market they're in
- due to the above, makes measly profits (both profit margin and absolute value in comparison with MS) or loses money in most quarters
- has already dropped the price of the PS3 by $100$ / 200 € / $200 depending on where and how you interpret the price drops
- has had the least time to drop the price of production

gorgepir,

You are ignoring latest financial results.

I believe you were talking about the xbox not the xbox 360. Since the xbox is no longer produced MS is not losing anything on the original xbox. The 360 as well is now profitable. As for Sony even with the PS2 still doing well Sony announced huge losses. This was all before the last price cut.

So you have Sony announcing a price cut on a product already losing money on each unit sold. Couple that they did it the quarter of the year with the most unit sales and you have the setting for a very interesting financial report by Sony in January. While 360 is profitable on each unit sold and the software sales are fantastic.

Sony will keep the PS3 price currently for at least the first 3 quarters of 2008 as long as the PS3 is selling >175K per month in the US. Microsoft I believe will be looking for closer to 300K per month and a nice bump when GTA IV releases so they will drop price right before GTA IV releases.

Actually Sony would be more likely to drop the prices again and that logic that THE gaming division is losing money is not exactly true. For every Blu-ray disc Sony sells they make a $7 dollar profit what they are doing by losing money on these systems is establishing themselves with a boatload of money in the future. The company as a whole decided to put the Blu-ray player in the PS3 to ensure the success of there new format and it is working. Sony would be more then willing to lose more money on the platform to continue the Blu-ray's dominance of the the HD movie war.

My guess would be that, the Xbox 360 would see price cuts arround 1. April 2008.
HD-DVD drive from $179.99 to $149.99
Xbox 360 Arcade from $279.99 -> $229.99
Xbox 360 Premium from $349.99 -> $299.99
Xbox 360 Elite from $449.99 -> $399.99

Playstation 3, will first get pricecuts fall 2008:
PS3 40GB from $399 -> $349
PS3 40GB from $499 -> $449

If Wii gets one the at then fall 2008
Wii from $249 -> $199

They don't because one them needed to stop. If they would have, sony would dropp it again sooner. I don't think we see a price drop of the PS3 early in 2008. September the earliest. They drop the price if they have 45nm CPU and 65 nm gpu. Before that, they only will drop if they are forced to (e.g. 360 drop>$50)

Edit: Confused the years.