Just thought I would point out that there hasn't REALLY been a price cut to the PS3. What we have right now is a 'clearance sale' marked as a price cut. As soon as the 60GB model sells out, the new 80GB model is coming out, at the original price. So in a couple months, PS3 will be back up to it's original price.

On pricing the console even higher: #1 Important thing is getting good games made for your console. The higher the price, the less people are going to buy it. The less people your console will reach, the harder it will be to convince all the developers to release games on your platform. (one of the problems I see, I'm sure there's plenty more)

Where are you people getting this information from? There has been a price cut on the ps3 the 60gb system dropped to $499.99 that is a price cut, and its not a clearence sales scea said they just dropped the price and by no means are they going to dis continue anything, and the 80gb sku is a limited edition model price at $599.99 with a game.  To me that is a price cut. And they are not going to dis continue the 60gb model.

Because ludicrously expensive games systems always buid such huge userbases. Everyone (rightfully) freaked about $600, $1000 really would have went over well.

A much wiser would have been "Don't stuff the Playstation 3 with worthless features people who want to play GAMES don't care about."

One of the main reasons why Intel CPU was a bad choice for the XBox was that Intel does not have very good licencing terms for companies to use their processors; there is a reason why IBM, TI and ARM are still far more common embedded processors than Intel processors.

Beyond that my architecture would not (necessarily) be less powerful than the XBox 360 ... Much like real-time graphics, physics (dynamics) is a highly specialized and parallelisable problem. What this means is that a inexpensive specialized processor is far more powerful than even the most expensive general processor ...

Think of it this way, create 2 systems:

1) Quad Core Intel with no Graphics card
2) Single Core Intel with Geforce 6800GT

Currently the second system would be less expensive and outperform the first system when playing modern games.

@ GhaleonUnlimited 

Well I care about all the extras compared to the XBox 360, all nicely intragrated. Likely many do considering the 60GB PS3 (faster HD,with Wi-Fi and card readers) model outsold the 20GB model conisderably.

Now people have a choice, go for a lowend console like the super cheap PS2 with its huge game library or Nintendo Wii with an interesting new control system. Or a high definition console like the XBox 360 and PS3. What if the PS3 only offered similar specs as the XBox 360 does, wouldn't that limit consumer choice?

Some things are hard to put a price tag on, like for example console sturdiness, personally I would have preferred a far more sturdy XBox 360 costing for example 100 dollars extra. Other things I disliked like the XBox 360's huge powerbrick and DVD drive noise compared to the PS3 is also hard to put a pricetag on, but again I would have preffered a more silent better integrated box and this would have been worth an additional 100 dollars to me as well. Free online multiplayer isn't worthless to me as well, again worth some money to me on the initial investment. Now for the most distinguishing features:

1) PS2 backwards compatibility - There isn't any XBox game I would have liked to play on a XBox 360. Halo? Why? There's Halo 2 and Halo 3 will be out soon. Ninja Gaiden Sigma Black? Well I could get the improved version for the PS3. However I love to play PS2 games like the God of War series, Jak and Daxter series and Ape Escape series on my PS3. Okami and Shadow of the Collosus are on my wishlist. Emotion Engine software emulation seems to work fine so far (the PS2 graphics chip is included in the PS3).

2) Blu-Ray - For me it's great to have a all in one package. IMO being able to playback high definition movies on a high definition console by default makes sense (as does HDMI 1.3 and 7.1 audio). But even if you don't care about Blu-Ray movies games can also take advantage of the additional storage. Added benefits include silent drive, as the drive doesn't need to spin that hard due to the higher density on discs and Blu-Ray discs are pretty much scratch and smudge resistant.

3) Cell processor - According to IBM the processor is about 3 times as fast as the XBox 360 CPU, although there's a catch that game engines need to be redesigned, Sony is working hard with 1st and 3rd parties to address this.

IMO there's no need to be upset about the PS3's price point. Can't afford a PS3? There are still many excellent PS2 games coming out and many classics are available at budget prices. 

THE PS3 60gig is discontinued... there are stories all over the internet about it, scea pres has said it

sony gaming head has said, once the 60gig is gone there will only be one sku- the 80 gig...

what is unknown at this time is what PRICE the 80gig is going to be after the 60gig is sold out.

right NOW it is 599....

no where has it been stated by anyone that the price will be reduced to 499- yet.

@ lenardo

heck they should've put hte ps3 at $999 that way it would die that much faster and sony would leave the gaming market all together cause of it floppin so hard and fast

You don't really get it OP. They are doing whats called "investing." They spend a bunch of money now in the hope that, in 5 years, Blu-ray is dominant... Thats the only reason they're willing to lose money on their PS3 sales. If they didn't think any money was gonna come out of the PS3 eventually, why would they launch it?

It's always easy to say there's no problem when you have the money to get whatever you want. Now what do you tell the game publishers who hated the price point because they knew it would limit sales, limit their market and as such have started jumping off Sony's boat?