Make up for it in value then. Bundle a game, show off the multimedia functions... lots can be done...

The PS3 price cut last year took the PS3 from rediculously expensive for a game unit to just expensive.  Yes, it can play blu-ray movies, too, but considering the low movie attach rate compared to game attach rate for PS3s it's most often purchased primarily for games.

Also, the USA economy wasn't struggling last year like it is now.  Consumer confidence is very low right now, with a recent poll suggesting that 79% of American's believe they are in worse financial condition this year compared to last (primarily caused by high gasoline prices and the resulting effect on the price of everything else).  Even a $199 price tag can only go so far to avoid the result.

It's difficult to say what the sales would look like right now if the US economy was roaring.

wow numbers are bad this week for everyone. I don't see 360 sales picking up for a long time even with the price cut. Only when fable 2 comes out will the 360 number be where they should be. I also see ps3 numbers should go up as well but I see the wii number going down as hd console numbers go up. This holiday season will belong to the 360/ps3 because the price of a hdtv will hit 200 dollars for a 20 in and under 350 for a 30 in and with 360 at 199 a lot of ps2 gamers will make the switch

IS the situation of the economy really that bad crumas2??

I mean we hear terrible things on the news like banks closing down but has the population been directly affected yet??

I believe Wii is supply constrained. Stockpiling them up to increase demand for Oct-December Xmas sales surge.

360 price cut effect already waning in the states.....do MS have anything left to throw at the market to sustain a long term sales boost?

Good but not exceptional, and already dropping WW, numbers for XB360, but I'd wait another week in NA and two in Others to see how sales start settling.
Sony could need a price drop, but IMHO they'll wait at least another two weeks before deciding.
About low overall sales for gaming industry: yea, economic situation is bad and consoles are too expensive and not enough hard to throw at bankers and economists' heads, I guess people would rather buy bricks, or rifles, if still rich enough...

@darth
People in the US are impacted by a few factors right now, four of the biggest being foreclosures due to foolishly going for ARM loans the could not afford, over-extension in credit card debt, off-shoring of jobs, and rising fuel prices that have a ripple effect on other prices.

         NO.....

        but because of the increased price of gas, food.....well everything, people are re-evaluating impulse purchases like a PS3, Wii, 360.  It makes sense.  When it takes me $73 dollars to fill 1 vehicals gas tank, and $35 to fill the other every 15 days ($216) monthly, I may hold off on the $60 360 title I want because I need to take my kids to school, and drive to work LOL.   

X360 to x360 SLIM anyone?