From the way things are shaping up, I think Sony is planning to announce some very big things come October. A lot of people seem to thing that Sony will just ride their recent momentum through the holidays and hope for the best, but I think otherwise. Here's a list of announcements that will come this October.

1. LBP will be released, and the release will coincide with firmware 2.5. Firmware 2.5 will have crossgame invites, crossgame voice chat, and most importantly, PSHome.

2. In some way they will announce a SOCOM bundle that will come with a mic, SOCOM Confrontation pre-loaded, and some voucher for some cheap game online.

3. Sony WILL announce a price drop to a core model that will sell for $350 or below. Its going to happen, flat out. This model may even come bundled with Iron Man on Blu-Ray, which would definitely move come consoles for the movie fans. This would come out in Novermber.

4. Sony will release a LBP bundle in America for $399. I think they mic include a mic with this one, but im not sure.

While profitability is important, keeping the price high and selling more consoles isn't the only way to do that. I think LBP could be huge, but it won't be while people have to pay $450 to player the game. Sony has already announced that they make more money on games than they lose on hardware, and if PS3+LBP can reach a more mainstream price that trend will most likely continue, since LBP will be the best selling Sony published title to date.

I don't think Sony is forfeiting NA like many people think they are to Microsoft. I still think the PS3 will outsell the 360 but a couple hundred thousand in NA this holiday season.

Edit:

I forgot to add that Blu-Ray players also seem to be dropping below the $299 mark for this holiday season, so Sony dropping to below $350 wouldn't effect there sales as much anymore.

I still think there is a good chance of a small price cut in October (with another one in the spring) and most of those things sound about right, though I would expect that SOCOM PS3 to have Warhawk as well

Other people are gonna say a price drop is not likely, Sony flat out said no, etc... But I'm starting to lean towards your way of thinking. Surviving in business is about change and adaptation, and Sony probably should drop prices, not b/c of the Arcade but b/c of the Premium and Elites.

Stockholders or not, I dont think Sony should trade more favorable numbers for a quarter or two in exchange for market share which will only matter more over time.

Wait, so you cant do cross game invites and cross game chat now on PSN? Boy-o. I thought that was implemented in the XMB ingame, oh well, you learn something new everyday.

Of course price cuts are good for the wider consumer, but I would have thought Sony fans would hope they dont have to do a price cut this holiday to muster sales. Sony needs a financial boost as this will probably be the last PS2 era Christmas and so with the already projected huge holiday for all 3 companies, it would be better for Sony and their business to gain maximum revenue at this price point. This would help boost their PlayStation books and get ready for a bigger 2009 where they have more leeway to reduce prices.

price cut will happen if 360 sales keep up in america. but a euro and jpn price cut is as good as confirmed.

all of those are likely, but we may only get 1 or 2 of those 4.
i would think a bundled lbp for 400$
and possibly 2.5, very unlikely but possibly.
i don't think we will see a sub 400$ ps3.

I hope 360 sales pick up in September so that by November we get a PS3 price cut.

I'm really hoping for a LBP bundle and price cut so that I can get the 80 gig core with LBP for 350.

If they do cut the price this year, I think it will be for NA and JP 1st and then EU early next year. But either way MICROSOFT will have to put up a good fight this holiday which they will.

I don't see a PS3 pricecut this year. Maybe by Feb. 2009 at the earliest.

Guess only time will tell.