Nothing was gonna kill Nintendo's hype. It was inevitable that Nintendo would be on top of the 7th gen.

HOWEVER, Microsoft may not have been skating by so freely like they have been and could possibly have been in a struggle against Sony if Sony launched at that price.

$400 is still too high for a gamesystem but it's much more easier to swallow than $600.

I wouldn't say they would have destroyed Microsoft per se but they would have put up a big blockade to XBox's partial success. XBox was gonna improve in the 7th gen but they may not have gotten that defacto American market like they have now.

Ask the question about if they launched at $300 like the other two Playstations. The results may be more interesting.

John Lucas 

I'm not too sure of that. In the XMas 2006 launch window, I'd swear that it was the PS3 that got most of the hype, owing to the raging success of the PS2, and the absolute insanity that followed its launch. It seemed to me that Nintendo was being viewed with a skeptical eye, even by the gaming press who had lined up for hours at E3 to get a crack at the system. I think people were putting a lot more stock in the PS3's BluRay and high-def graphics, as well as Nintendo's soiled reputation in the home console market. Many were expecting Nintendo to do better than they did with the Cube, but no one saw it becoming the biggest turnaround in gaming history. It didn't even seem like the Wii's success was truly being recognized until this spring, when it could no longer be denied that something odd was going on. 

IF they did then it was all over

Sony would have to file for Chapter 11 by now.

I wouldn't say that. Reference E3 2006 & those long lines for the Wii. It was an omen of things to come.

John Lucas 

So you're telling me that given a choice between a $400 system with a few good games and a $600 system with the same games, you wouldn't have a preference of one over the other? I find that hard to believe. 

Suppose that the 60GB and 20GB PS3s had gone initially for $500 and $400, respectively.

The PS3 would have had MUCH better sales, of course ($400 being a workable price point as MS proved, and $500 is pretty close to their Elite). But the really interesting thing is that I don't think that Sony'd have ultimately lost too much more money because it wouldn't have needed to do the endless redesigns of 80GB version, 40GB version, etc. Honestly, even if the (reported) $27 savings of the 80GB's hardware was worth it, I understand that the 40GB version saves them a really negligible (additional) amount.

The simple fact is that Sony was caught with its pants down because it thought that the Playstation brand was invincible. It's not, and they should have known that considering it got where it was by usurping the former supposedly invincible brand name.

@ Eugene

whats the point assuming something that didn't happen?

but to answer your question, it would have sold a lot more, probably 30-50% more i'd guess.

I really believe the PS3 would have done much better. I know I would have bought one sooner and believe that it would have gotten more of the stand alone Bluray player sales. The system is quite good and I agree the lack of SW is an issue. I think 400 and a promise of great SW is very different thatn 600 and a promise of great SW. I do believe that $299 is still a magic price point (having worked in Consumer Electronics for 10 years), and have constantly watched sales explode. I would expect PS3 to be at 16 Million by the end of the year if they had started at 400. Also I think that both Microsoft and Sony need to get rid of the multiple SKU's. This is crap, and any confusion for a sale is a potential lost sale.
RabidBunny