(1) You are the one who is wrong.  If people want to afford a $599 console, they can.  People buy $30,000+ corvette cars for entertainment.  They buy $3500 TVs for entertainment.  They buy $2000 computers for entertainment.  You're telling me that people can't afford a $599 luxury when they're buying much more expensive and similar luxuries all of the time?  Hell, the government gave most people/families $600-$1800 recently to spend on luxuries and service to try to improve the economy. 

People can afford $600.  They simply choose not to because they don't perceive the PS3 as worth that much money.

(2) The Xbox 360 improved drastically on the Xbox's launch.  The PS3 dropped signfiicantly compared to the PS2's launch.  You can say, "hey, Sony is still doing as well as Microsoft" but the fact is that they were way ahead of Microsoft before this generation and being in this position is a huge loss for them.

I never sold my wii... I got a ps3 and was about to sell my wii. But then i sold the ps3. PS3 and xbox360 are same consoles minus exclusive content...which I preffer on the 360 side for now. Wii is a social machine...when GF is over we play the wii mostly. (even though we play xbox live games like castle crashers and geometry wars lately).

So I kept the wii and sold the ps3 instead...not saying PS3 is a bad system. But all 3 consoles at the same time is too much...unless you have all the time in the world to play videogames. I'll pick up ps3 later when price is right and more games are available cheap.

I don't think PS3 value/price was wrong at launch - the demand for the spec was wrong.

Put simply if you wanted a high spec HD gaming console and a BR player and online play it was superb value.

If you wanted a high spec HD gaming console it was too expensive as you didn't care about the BR.

Sony had two choices - start firm on the value/price and see smaller sales to those who wanted BR at that time, or take a cost hit to get price closer to what those with no interest in BR at that time wanted.

This balance remains their price issue - although with time if BR adoption rises then the percieved value of the BR in PS3 will rise too.

MS were able to be firm on price for a while as it was pretty good for what 360 offered (although their add-ons like HDD have always been way overpriced IMHO). However recently PS3 growth and Wii going through the roof have forced MS hand (and the player with still the smallest market awareness IMO) to cut prices to remain viable. If MS did not cut prices with current trends they would be handing Sony 2nd place WW on a plate - so of course they are going to cut prices.

On the other hand despite having to jump for price early on recent sales and trends have probably put Sony in a better position to hold price than MS.

360
299/399 = 25.1% price cut in 3 years
199/299 = 33.4% price cut in 3 years

PS3
499/599 = 16.7 % price cut in 2 years
399/499 = 20.04% price cut in 2 years

If next year Sony cuts another 100 bucks from each sku3

399/599 = 33.39% price cut in 3 years
299/499 = 40.08% price cut in 3 years

If Sony was to cut by the the same % as microsoft then the prices would approximately be:

80GB = 329

160 GB = 449

Is that not contradictory? If you had a single electronical device that could play your games, movies, music, etc you would use less power and heat. And the PS3 is super quiet, DVD players are much louder. You also would have more space because you would have less devices to manage. Your point is moot.

And I too think it is unfair to judge the PS3's pricepoint. Firstly, it was sold out the gate at a huge disadvantage, with all of it's bells and whistles accumalating around 800 bucks. It was sold at 600. Demand for a price cut was too strong so many still waited and Sony gave in. Now they range from 400-500. The standard 360s were still under that sku pricing point. Yet the PS3 continued to outperform it in sales. That shows that if they were around the same price the PS3 would be the overwhelming victor easily. It is it's price point that holds it back. People want it, just dont want to pay so much for it. More so then they do for the 360.

I also find it very unfair to judge the PS3 for including so many bells and whistles within it seeing as MS sells plenty of all the accessories that the standalone PS3 matches. All those people who pay for play and charge kits, hardrives, HDDVD players, etc, have spent way over the PS3's price tag and dont even know it. With the single purchase of the PS3 all of those accessories become null and void. And I KNOW MS sells quite a few accessories because I work in retail. The idea baffles me how people fell for this marketing ploy...

all depends on changes in cost to produce

 Pah, you should have heard mine during the summer months. It was like a hairdryer

lol, the hairdryer sound only kicks in when it overheats. Its still not any louder then most other appliances. My old DVD player made clanging sounds whenever I popped a dvd in it.

Sony's price cut was in about 8 months, wasn't it?  not two years.

Sony was desparate for sales.  Third parites were loudly complaining -- Square-Enix is a big example of this.  They complained about Sony's performance and when Sony announced their $100 off fire sale, Square-Enix said it simply wasn't good enough.

You don't use it to play games and movies at the same time? If you have a standalone BD player or DVD player (depending on what kind of BDs or DVDs you're watching), then you'll almost certainly save a lot of power compared to having the PS3 play your movies.  The same goes with music -- an ipod, for example, clearly uses a lot less power than a PS3.  Sure, you could use it as a music player but it would be a hell of a waste of power.  And I think that was the original poster's point.

But the issue here is that Microsoft waited nearly 3 years to cut $100 and Sony had to do it before their console was even one year old.  So who is desperate this generation?

(1)Yeah If people wanted to pay half of their monthl salaries they can , people buy $30,000 + cars , expensive TV's etc but these people dwindle in comparison to the no of people who buy $10,000 cars , cheaper TV's ,PC's etc ,that's not because people don't think that the expensive TV's are good value for money or the nice cars but they'd either have to A.Sell their houses for such luxuries B. get in to serious debt.

.Around 75% of the wealth belongs to 25% of the population in many developed countries and the diversity is even worse in poorer countries . Consoles are made for mass market penetration so they should have a price point which makes that goal possible , The PS3 wans't fit for the purpose of mass market penatration with it's oringinal price point Sony relied to heavily on the power of the PS brand and they suffered for it.

I say it now and i'll say it again, none of the other current gen consoles would have sold relativley well at all with a $600 price tag , the PS3 is a gaming console primarily and the average consumer will not spend $600 for the luxury especialy in our current economic situation.

(2) Every generation is effectivley a new race you could argue Sony was performing badly relativley to last gen but that would make sense because i don't recall any brand coming strong 1s for 2 or more generations except for Playstation , it's the nature of this industry to do well one generation and flop the next , the consumer isn't as brand loyal as you think they'll go with whatever console fulfils their needs ( Nintendo wasn't No.1 for at least 2 generation before the PS3 but that didn't proove to be much of a disadvantage for the Wii.