If that's true, then Sony is missing an opportunity. They could drop the price this year, and crush the 360. They may never get another chance this great again. Slim 360/Halo Xpak could exist and launch next Xmas, you never know. Sony has a chance this Xmas to destroy the 360 with a price cut. It would only hurt their short term profit, and it would grow their userbase, while reducing userbase and buzz around the new lower priced 360. It's not that Sony needs to cut the price, but if they did, it could deliver a crushing blow to the Xbox 360, and knock its comeback run out cold.

If they don't, they probably won't ever get another opportunity this good, to derail the 360 as completely as a huge price drop for Xmas could.

If the 360 manages to outsell the PS3 this christmas, its yet another missed opportunity chalked up to Sony's "coasting" strategy, in which they sacrafice presumptive IPs, future selling points, and market position via competition, for short term profit and success in the eyes of shareholders. Yes, Sony needs to turn a profit with the PS3 eventually, I just hope the PS4 doesn't pay for it down the road.

Okay... so what's causing Woolworths to go all Wibbly-Wobbly in the UK?  The problem here in the states is primarily due to ARM loans that should never have been given (and the ensuing consumer panic now that the issue has come home to roost).

The problem is almost all the banks in England are linked financially to banks in the US. Hence when it started to cave in the US, noone here in the UK could get credit including mortgages. Hence our housing market began to crash and is in a bad way. The bank of England is having to bail out some big name banks here, much like the government in the US is doing. It's a much bigger mess and knock on effect than you think.

@crumas2 We're exposed to the chrisis in america through our own financial system in the UKmaybe because our banks lent money to banks which eventualy wet bankrupt in America , i'm not exactly sure .

We've been discussuing the merits of Selnor's argument down at the HQ , I think that he does have a point the 360 will be less affected in sales than the PS3 because of the economic climate , however the PS3 has sold better with a high price point so in poorer economic conditions it should still sell heathily , Sony's priority is profitability so unless sales really suffer there will be no need to cut the price so those who demand the PS3 can buy it.

Let's also consider that there isn't as much demand for the 360 as there is for the PS3, yes the 360 sells better at 3 times less the price point of the PS3 in europe but that's only due to the fact that it's dirt cheap .There is still more demand (or desire ) for the PS3 console the only problem is that the price point is too high for the desire for the PS3 to translate into 1:1 desire:sales.

Consider the ferrari example, there is crazy demand for it but it doesn't sell crazily . If it was dropped to £5000 for a day it would probably sell more than any car has ever in a day that is because those who desire it would have the means to aquire it , sales and desire 1:1.

Okay... our housing market issue is a little different in the US.  Our housing market started to crash a while back because of a "housing bubble", i.e. - market values had risen past reasonable levels, and then when there was a market correction people found themselves suddenly upside-down in their mortages, i.e. - unable to sell without taking a huge loss.  Also, condominium builders didn't scale back a few years ago when the market for that housing went soft... they just kept building on speculation, hoping the market would bounce back, but it didn't.  Now there are areas (such as the west coast of Florida), where huge stretches of new condos remain empty due to overproduction.

And you're right... even though I heard that financial institutions were impacted globally by the US problem, I didn't realize it was having a ripple effect on the economy over there.

Sorry, but I can't picture the PS3 as the Ferrari of the console world.   Perhaps the BMW...

I have to believe the PS3/360 gap exists primarily because RROD burned too many people in Europe, and MS didn't extend the 3-year warranty to you.  I guess if 360s were 10 pounds, then they would sell like hotcakes because people would consider them as consumable items.

I know it's pretty wierd the effect. As mentioned because of the lending issue here in the UK, it's now affecting retailers such as Woolworths who cant get the necessary borrowed funds at the right rate to stay profitable.

They had this chance a few weeks ago. Analysts were worried if the Xbox 360 is loosing steam compared to the PS-3.If they would have answered to the drop of Xbox 360 with their own price reduction they would have give Microsoft a major headache. That they didn't react in this manner is a clear indication that they are probably not in the shape to lower their prices.

And now they are no longer in a position to do suich a thing. Currently all companies take a tight look at their cash, due to difficult credits. Such a move would probably need a significant credit, but which bank will give you such a credit at the moment with a cheap rate?

 How long is christmas over there in Panama? Because the Ps3 needed the last 4.5 months of 2007 to sell 4.9M. That's 1/3 of the game.

You try to work with pure logic, but you have to look at the feelings of the people. Which are the strong points of the PS-3:

BluRay

Bigger hard drive and you can ionstall your own HD.

WiFi included

The problem is: all these things have more to do with convenience, than with useability. While BluiRay looks gorgeous on big TVs DVD can really compete on smaller once and the films cost less.

There is newer a big enough HD, but you could simply drop content, that you don't use at the moment. And WiFi can be replaxed with a cheap cable.

If people are worried about money they place their own convenience much lower, if they feel safer.

Most people decide according to their feelings, while the logical arguments are more or less used to justify this decission.