the ps3 does not need to keep up with microsoft for sales, they are doing better then they did last year and that all what matter really

They will not fall behind the 360 in sales again. Being the junior partner in the big PS360 multiplatform game market was bad. They got crappy ports if they got them at all. So if the 360 sells more Sony will react. I am pretty sure about that.

Besides I think the effect of 100$ price cut on their profit is overrated. 10 million consoles ~ 1 billion dollar. That's less than MS lost on their quality problems. On the other hand with every console they sell more they will make money for games, downloads, peripherals, BluRay discs etc.

Much of their loss is fixed anyway: Development costs, advertisement campaign, game development costs etc.

So the question is when will the price-cut cost bring a return on investment to them. And somehow I am sure that Sony won't sit by while discounted 360s sell like hotcakes in the hugely important christmas season. They didn't do this last christmas and they won't do it this christmas either.

And finally the Ps3 will be 2 year old technology by then. If you look at PC prices you can be sure that it will once again have a substantial production cost drop till christmas.

But again this is like predicting the weather. We simply will not know till it happened.

Before the shareholders the directives have to say whatever suits the reunion Benga Benga.And as the shareholders are only interested in how much will they get for their shares in the company you have to tell them you are going to create value for them ,you are heading for profitability etc.

But later you do whatever you want (with some limits of course its not a question of shooting yourself in the foot) and in the next briefing with them you tell them it was neccesary due to strategic decisions.

I do not think gamers care whether or not Sony makes a loss with a price cut this year. Most PS3 owners are waiting for the PS3 to drop in price. $400 to $500 console in US is out of reach for a lot of people. $300 price tage now that is very price attractive.

PS3 price drop in US is unlikely. But a PS3 price drop in PAL region is possible before Xmas this year. PAL region pay double the price the US customers pay for all consoles.

True, but then there are first-party games where every additional game goes fully to SCE. (Of course not all profit but their dev costs are fixed so they either have the 60$ or not), people buy a second controller, perhaps a Playstation Eye, some games from PSN, perhaps a couple BluRay discs where Sony again makes a buck or two... I would really like to know how much money they make on average with each sold Playstation.

Rock - Sony - Hard Place

BengaBenga is correct, and it will be nearly impossible for Sony to reduce the price of the PS3 and maintain their profit projections for this fiscal year; at the same time both Nintendo and Microsoft are in far better positions to reduce the price of their console which could hurt the sales of the PS3 (at least in some regions).

Sure $400 is too high for the mass market, but who says Sony has to sell at a loss in order to reach the mass market? Profitability is more important than market share.That is common business sense, everything else was hybris. They will just have to wait it out until component prices come down, which will probably not be this year.

If the PS3 really should have sold for $800 in 2006 and costs have come down 25% per year since then, they might just about break even on the hardware by the end of the year.

One thing to comfort them: It's much harder for XBox than for Playstation to sell into the mass market. Many PS2 owners will just wait another year before they upgrade to PS3, especially in Europe.

Sony HAS to lower the price. That way, I´ll be able to afford one.

PLEASE, SONY, PLEASE!!! :(

I believe Sony will try to maintain their current price point until they see what effect a 360 price cut will do in NA.

If I remember correctly, didn't Sony have to shut down some division in order to eat the losses from the first price cut? I highly doubt they'd do such a thing again (maybe a small cut).

I think we can all agree that this holiday will be pivotal in the marketshare battle between Microsoft and Sony, and I can't wait to see what happens.