Disclaimer : By entering the thread you automaticaly agree to actualy read my posts and reply with some intelligence , thank you. I may have made some numerical errors so bear with me.

And here's why ....

Average earnings of full time workers in the Uk £457 http://www.statistics.gov.uk/cci/nugget.asp?id=285

LAUNCH PRICES

XBOX 360 £300

PS3  £425

price difference between consoles = +£125

CURRENT PRICES

XBOX 360  £130

PS3   £300

PS2  £80  (amazon.co.uk)

PSP  £130 (argos )

PS3 price difference = +£170

PS2 Price difference = -50

PSP Price difference=  0

Launch Vs Current price comparison

PS3 £125

XBOX 360 £170

Despite the PS3 cutting price quicker than the 360 I don't believe this was due to a lack of desire for the console but more likely a general lack of affordability.

the biggest influence on sales is price however demand is not neccaserily dependant on price ( e.g a £100,000 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 ( In reality more people are buying PS3's in europe than XBOX 360's despite the price point being higher) 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(or able to afford).

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 be more desirable) . 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 £125 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 £125 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 then the PS3 will be where it  needs to be for mass sales , the mass market.

In conclusion Sony cut the price of the PS3 to give the customer what they do want , Microsoft cut the price of the XBOX 360 to give the customer what they may want , of course this is a generalisation there may be people that desire the XBOX 360 regardless of price.

We can also see that the XBOX 360 is within range of last gen prices , it's currently the cheapest current gen console and also the worst performing current gen console ( in terms of weekly sales) . It's apparent that the XBOX 360 isn't desired as much as it's competitors so Microsoft effectivley have to force feed the european consumer with it.

Because i'm from the UK i gave the analysis using the £. the european market's situation is similar the american market with the XBOX 360 having more of an edge there than it does here.

A good generalization. I believe you are correct here. However someone needs to make another thread analyzing why 360 doesn't have the damand that ps3 has in Europe when its clearly a better gaming console at the moment and it costs much less. I guess bluray may be a big thing in Europe...

How about you compare the launch price of the 360 pro with the current price of the 360 pro. If you want to consider the cost of the 360 without a hard-drive, the core cost £199 at launch and the arcade will be £130 after the price cut, so a £70 cut in 3 years. Doesn't sound too desperate does it?

I think you give sony to much credit.

@disolitude
There is large demand for 360 in euro, as many 360 buyer are waiting for this coming price cut.
You will see it in the next few months.

I'm comparing the cheapest a console could have been obtained at retail at launch compared to now , a low price point is usualy essential for mass market penatration.

itll be interesting to see what this new price cut does

Err, no you aren't.  The 360 core launched for either £209 or £199 (can't remember).  You're comparing figures that suit your biased argument.

Launch as in the first release of the respective consoles ? what are you talking about .

The Xbox 360 was available at launch as either the pro or the core.  You should be using the launch price of the core in your calculations if you are comparing the cheapest a console could be obtained at retail.

Edit: http://en.wikipedia.org/wiki/Xbox_360_launch