And whatever else happens, the PS2, a.k.a. The Console That Wouldn't Die, will sell at least 4 million units worldwide in 2009, even without a price cut.

sony must make the ps3 $299 for next christmas at the least! even if they vcut the price in december. they need the huge sales and a $299 ps3 wuld give them massive sales. not just in america but europe and japan also.

they would need to cut before Dec 09. Price cutting in December is not smart since many have already spent their alloted budget on Christmas gifts after BF weekend. IF Sony price cuts (see my post above for the qualifiers) then I think it'll be in September, which is probably the best time price cut because it is before your heavy hitters are out of the gate for the Holidays but not too early that people don't care (like I think March would be).

As for the 360 Arcade, I don't think adding an HDD would help sales at all. Dropping the price even 20-30$ lower would cause more of a stir in mid to late 09 than adding an HDD. The people buying arcades don't really care about hard drive space, I think.