I believe 2010 was PS3's peak year and we will see slowly declining sales from now on. There are many reasons to this:

1. Market saturation. Most of those who are interested about this generation console have already bought them. Home consoles have been sold 180 million now and last generation had around 190 million units sold. While this generation will be much larger, even this generation have its limits. Most households still buy only 1 console per generation, multi-console households are still rare.

2. Price point. 299 € is not that much anymore, unlike last generation (inflation) so I don't think that prevents sales. Sure 199 € would increase sales but much less than dropping to 299 € did. And I don't think Sony is going to drop price by more than 50 € because I feel they are satisfied with current situation and they want to profit from sales at last. Remember, profit is more important than unit sales to all companies. Selling at loss is strategy which is meant to have big console base and profits later in console's life.

3. Blu Ray. People don't buy PS3 just for BR anymore because there are cheaper and even better dedicated players. Even at 199 € you can buy much cheaper and just as good BR players. Now, PS3's are mainly for games and BR is just extra feature.

4. Stereoscopic 3D. While 3D TV's are becoming more popular, 3D TV base is still too small to increase sales at this stage (many 3D TV's are used with dedicated BR players, not PS3). And most 3D games on PS3 are made by first and second parties. Third parties won't make many 3D games because of increased costs although it only increases sales marginally.

5. Games. Sequels on same consoles have less effect on sales than prequel had. For example, Uncharted 3 increases PS3 sales very little because most buyers are fans of first 2 games and have PS3 already. And PS3 has already had their biggest games released.

1. last generation 207 million consoles were sold. And the generation before that only 145m consoles were sold. So if the same type of increase occurs this generation we will see around 300 million consoles sold. Trust me a lot of people have bought a console this gen that didnt last gen.

2. And the price still isnt attractive to people in developing countries. They will start buying more when it comes down even if the main markets wont. A lot of countries are now just buying Ps2s.

And inflation hurts your arguement. People are making less money yearly because their raises don't compare to how fast cost of living is going up. Poverty line for a 4 person household is 24,000 dollars. The way you figure that out is the cost of food times 3. Most households make less than 45k. In '91 it was 41k. In '91 poverty for a 4 person household was 14k. Do the math

hehe no worries. I deserve it for being so hard on some people here ;)

oh god, i come in all grammer nazi like and then i make a mistake in my reply.  kitler fails.

1. How would you know if the market is saturated? Why do people keep on saying "wow console sales are down, the market is saturated" of course console sales are down, the 360 has been $199 for two years? The PS3 has been $299 for 2 years, the wii has been $199 for two years, the market is becoming more saturated at those prices, but once all consoles drop all of them will rise, but THE PS3 will see the highest increase since it would be available at a mass market price, meaning the average consumer with low income would actually be able to purchase one at $199, or $229

2. The 360 is cheaper than 199 pounds in many markets, the ps3 is still fairly expensive next to the 360, and has a lot of room to grow with a price cut, since it isn't at that mass market 360 price yet

3. Yes at 199 you can buy cheaper, and blu ray players as good as the ps3 in movie quality,but dropping the console to 199 would make consumers see it as a much selectible option next to a standard blu ray player

4. PS3 is one of the cheapest and best 3D blu players on the market, as 3D grows and consumer interest grows, the PS3 is an option for 3D movies/games,

The mass market price is being exaggerated far beyond its limit for the PS3 by some people. It's down this year and, even with a $50 price cut, more than which Sony cannot afford, it'll stay down. I'm quite sure that unless Sony pulls something miraculous, PS3 has already peaked. $199 in 2012 won't do much good on a six-year-old console with next gen looming on the horizon.

How is it being exaggerated?  The ps3 is relatively expensive compared to the wii and 360

Imo Sony should wait and launch the new price point to coninside with the release of the Wii 2. however i agree 2010 was probabily the peak year, unless anything can be achieved this Xmas, if not then i think 2012 will be the peak year, if the new price kicks in then...