In reality did anyone think that MS would really win against the Ninty and Sony? MS did not have a concrete price cut in America this year. They had a clearance sale which is a limited offer and the model that was reduced  was replaced with the 60gb sku that was priced at 350 but will now be 300. A clearance sale is not a concrete price cut. Now as I said in the previous post the PS3 offers a lot more bang for the buck b/f the 360 price drop. The key point to this is that MS kept their current system prices the way they are now for a very long time versus changing the 360s price as soon as the PS3 dropped 200 dollars. Obviously after 3 years and minimizing hardware costs why wouldnt someone drop the price on your console? With the insane amount of software MS sells as well as possible live fees/downloads im sure they could make up the difference even if they are selling 1 or more of the SKUs at a loss (speculative, we dont know if they are or not).

@Million If you look at the value comparisons for when the gen first started thats when the 360 still outsold the PS3. The price drop is merely a way to get back to those similar figures and hopefully generate more sales. Also most people discount the Wii as a current gen console (which is wrong) but the Wii could probably dominte the PS3 and 360 with a flick of the price tag (but it doesnt need to). The Wii is irrelevant to this topic and caters to several different demographics moreso than the HD consoles.

You may have misunderstood me about a theoretical price drop. I didnt call the 200 hundred dollar price drop desperate even though a lot of ppl interpret it that way. That was a bold move and showed Sony's confidence in the product to sell their hardware at a bigger loss and recoup the losses later in order to get marketshare and more revenue. What I am saying tho, is that if they did cut the price, say in early October or prior to LBP release, it would seem kind of desperate for marketshare since Stringer has alrdy confirmed that they are still selling the PS3 at a loss. I have no doubt that they could make up the losses in due time but doing a price drop now would almost seem like a move to just satiate the fanboys on sites like this in terms of hardware sales.

The PS3 doesnt need a pricedrop to sell atm. Its going to sell quite a bit of units IMO when LBP drops. Cutting the price when b/f the holiday season would only decrease their revenue IMO because it will sell great with some of its biggest games coming up this year. And like I said earlier dropping the price in say March with GOW3 (again speculative) they would sell more PS3s but also have a larger revenue intake from the holiday season and maintain its mementum through Q1 and Q2.

Again this is all speculative and my opinion. I don't care which console sells more/less as I have them all and enjoy them all.

No I just couldn't be bothered to fully elaborate my opinion , in both cases the biggest influence on sales is price however demand is not neccaserily dependant on price ( e.g a $50,000 Ferrari is high in demand but will not sell a whole lot at that particular price point) it's only when the price is at an affordable point that the demand for the console will = sales. in the case of the 360 the restriction the price point puts on the actual sales is far less than that of the PS3.

Price point is like hurdles , the more you put infront of the end line the less people are likely to cross it without alot of determination . More people are getting to the end line on the PS3 track despite there being more hurdles than the 360 track,if we remove more hurdles on the PS3 race track we're likely to get even more people finishing the race because the difficulty of the PS3 race track ( or the price point) is greater than what the average human is capable of.

I believe the potential demand for the PS3 is greater than that of the 360 ( historical sales statistics proove my belief , the PS3 sells better than  the 360 at a higher price point basic economics argues that the PS3 must experience greater demand) . Therfore the price of the PS3 must be a bigger factor of it's demand than the 360 , if less people want a 360 than want a PS3 then a $50 price cut won't have as substantial an effect on the PS3 as it will the 360.

We also have to consider affordbility as a $50 price cut will still keep the PS3 out of what many can afford ( yet it still outsells the PS3) , the 360 is already nearing an affordable price yet it is outsold by it's more expensive competitor . A move into affordability will also have a bigger impact on the PS3 than it will the 360.

Because the console was below 20k/week in the usa and 10k/week in japan for months? Because major third-party CEO's were clamoring for Sony to drop the damn price and forget about that media-computer concept they ran with at the start of the ps3 life? Sony had to slash the price 33% (200$) to make the ps3 competitive in the market. Even then, it never recovered in Japan (always been harsh to non-dominant consoles) but it saved the beans in USA and Europe.

Sony did not drop the price $200.  I think this has been discussed many times.  They dropped the price of the 60 gig $100 to $500.  They introduced a brand new sku with significant cost savings at $400.  It was a desperate move at the time that has paid off with substainable sales growth.  The MS price cuts in Europe offered some initial sales increases, but have slumped back to pre-cut levels. 

In other words, they lowered the barrier of entry from 600$ to 400$. That's a price cut.

Ahhh, economics.  I'm a few years out of my last degree, but I will acknowledge that there is genuine thought put into this argument.  I even like your hurdle comparison.  I feared from the post that I replied to that you simply truly had Sony colored glasses on.  I still would guess you strongly favor the Sony brand but there isn't anything wrong with that.

I'll say this though: I don't disagree with you on the demand for the PS3, and I totally agree that if they were at equal price points the PS3 would sell more.  The problem with this logic, is that Sony chose to front load the price (including Blu-Ray and Wi-Fi) while Microsoft chose to reduce the cost of it's box by leaving those out and selling them (at exorbirant prices I might add) after market so to speak. These business plans have led to the higher cost of the PS3 in comparison to the 360; thier choice.  Obviously then if the price was reduced to 360 levels it WOULD be a better value...Hi-Def Disc player and Wi-Fi for the same price...pretty straight forward there...

However I think the 360 can and will be competitive throughout this generation however and if they finish 3rd, but are making a profit on thier business model and software sales, the ONLY thing that 3rd place finish would accomplish would be to make some folks, feel better/worse about thier purchase on message boards...nothing else.  AND if MS improves thier market share, vis-a-vis last generation, they will consider this a SUCCESS, 3rd place or no.

For the record, I don't own a PS3...yet.  Owned every major console since the NES/SEGA era.  I see no reason to change now.

What he said. I know it was a new SKU and im sorry if the phrasing was misleading or whatever. Also Dbot you did basically say a clearance sale was a price drop in America this year even tho it was temporary. Either way the PS3 became a lot cheaper to buy no matter what you call it. You can call the move whatever you want.

 Exactly.  If someone wanted to get a PS3 before the adjustment, it would have cost $600.  After the adjustment, it was $400.  Call it a rearranging of SKUs, a price cut, whatever you want--the barrier to entry was lowered by 33%.

I hope you are not in sales and marketing.