My guess is by Q2 you mean between April and June, in which case that is highly optimistic indeed... I'd say it is highly unlikely the PS3 will catch up before Q4 2009.

@AvZeroMkA157

Frugal is a vague terminology, more about mindset then anything else. What is a frugal expenditure to one person is an extravagant expenditure for another. However lets just use some concrete numbers to see exactly where I am going with my conclusions. Last year the average holiday budget was $850. Now given the dire economic situation, and millions of consumers having lost thousands of dollars in investments. I do not think it is out of the realm or realistic expectation that the majority of consumers would curtail their holiday budget by a third.

Don't get worried I will do the math for you. That means the average holiday budget this year would be $580. Now a PS3 will run the consumer $400, and after sales taxes that would run the consumer at a generous five percent $420. That would remaineder $160 for a holiday budget. Include a single game for $63, and the consumer has less then a hundred dollars for all the rest of their holiday shopping.

That makes for a rather thin tree especially if the parent plans to fill stockings, provide clothing, and of coarse take into account the very finicky nature of their children which are notorious for losing interest quickly. Oddly this is a worse spread for consumers then when the PS3 launched to consumers two years ago. When consumers spent $630 for the console, and after purchasing a game racked up an impressive $693 price tag. Even then the consumer still had over $150 left to spend.

This is what I mean in comparison the PS3 has actually lost traction on pricing, and is actually going backwards. Effectively the price of the console has increased, and may actually be more expensive for consumers then when it first launched. Yes the price factor is more favorable, and that may help. However it will not help for as many consumers as it would had the economy not slipped into a recession. Meanwhile Microsoft and Nintendo both have consoles that can survive a now much reduced budget.

The Arcade for instance still leaves over $300 within the budget even with an additional game purchase. The Wii still leaves $265 with the purchase of an additional game. They are not massive drags upon the budget. The surplus is more then enough to fill stockings, buy clothing, and a number of smaller ticket purchases. The consumer can even shop for more people.

I know some will say well the numbers are unflattering, and to that I can simply say this. A five percent sales tax is more then generous. I am not factoring in unemployment. Not only the loss of existing jobs, but the jobs that will not exist due to the thin margins that will be felt this holiday. I also have no way to factor in credit based spending limits, or place a concrete value upon irrational fear. So I feel I did a rather respectable analysis. I did not paint a picture of utter death, nor did I paint a picture of the recession being a microscopic factor in holiday spending.

The bottom line is that the affordability of the PS3 will be a rather large factor in holiday spending. When consumers are bound to spend considerably less then they have in previous years. Let me provide a link to also show I am not producing these figures out of my ass.

http://americanresearchgroup.com/holiday/