The type of consumers that wait for a price drop aren't the type of consumers that buy every new game as soon as they come out. That's the problem with this whole, drop the price now and software sales will increase theory. The budget consumer buys fewer games and a higher proportion of discount and used games. So you can't apply the same attach ratio to the budget consumer.

The only way that theory will work is if you're either breaking even or making a profit on hardware after a price cut, something that is probably not possible for the PS3.

There is a first time for everything:

Twesterm, your post is full of win.

Sony will not drop the price until late 2009. They have promised their investors a return to profitability this fiscal year. The earliest they would lower the price is April 2009.

yeah twestern, i really hope you are saving the number of times you have to say that and add a new one in every thread like this.

I think that's exactly why they have launched a new version of the PSP.

AFAIK, the PSP and the PS2 are what bring in money all round for Sony.

PS2 is slowing down WW, no matter what Sony will try, so they focus on the PSP now.

The PSP-3000 brings in some heightened revenue and profit, creating some cash flow. That could bring Sony to "well, because our entire franchise of consoles + handheld is keeping us in the black, we'll drop the price of the PS3"-statements whenever it might be needed.

But for now, I think they'll ride it out, until they have no option but to drop the price. The PSP-3000 is their leverage to allow for extra loss in the PS3 department (IMHO)

No reason for Sony to drop price. Really this generation results are set so that 3rd parties are going to produce for both the 360 and PS3 and the PS3 selling more units this Holiday (based on drop in price) will not result in 3rd parties not producing titles for the PS3. So drop in price only results in 2 things happening.

1. More losses on PS3
2. PS3 Fanboys being happier.

Sony cares about #1 and couldnt care less about #2.

^I agree. The shareholders' interests are much more important than what console fanboys think. If you are nearly breaking even at your current price, you might as well stick with it for a longer time until you really break even by a substantial amount.

Besides, it'll be very silly if Sony equals the total number of price cuts to the GCN during its generation in less than two years!

Reasons for price cut:

-slightly lower production costs
-more revenue with little extra costs, the video download section
-Games division achieving profitability

Reasons against

-Sony might want to include a headset w/ the more expensive SKU or the one coming up, which would increase the cost to put out that by about $20
-Sony corporate depending on the games division to be profitable, b/c sony corporate has done poorly with respect to profits this last quarter
-The 360's price cut hasn't really amounted to a whole lot of anything so Sony may feel that they can get by without a price cut if they add an extra like the headset, and bring HOME in as well as bring out some more games.

I don't see Sony dropping the price of the PS3 this year.

The price cuts on the 360 did give it a sales boast for a few weeks.....but it's already fallen back to basically parity with the PS3.   I find that very telling that the PS3 is holding it's own against the 360 given the current economic situation.  The PS3 at almost twice the price is still selling well,  and I see it's sales only increasing as the holiday games hit the store,  Blu-ray and HD TV sales also adding to the demand to acquire a PS3.

I have been saying it for well over a month now. This week and next week are going to be very important weeks for Sony and the PS3. If Socom, Little Big Planet, Bioshock, and Indiana Jones have no effect on sales, then Sony will have to come up with something. If they fail to reach over 175k by the week ending Oct. 26th then they have to think about publishers just as much as investers. They have made a commitment to investers that they will bring in profit. To help do that they have went to Developers, and movie studios, and promised them a user base in return for their content. They have to make sure that they walk the fine line of making both of these parties happy.

Based on the kind of games that are selling the most systems right now, Little Big Planet should be the biggest hit this holiday. It bundled with PS3 is the best value you can get this holiday. Now it is just a matter of how well Sony gets that across.