The nascent movie industry flourished during the Great Depression.

I expect relatively modest luxuries such as entertainment to do fairly well during a recession because people generally regard them as needs rather than wants.

Of course it caused trouble at Sony, that's a fact. What I'm not so sure about is the impact of the 360 price cut. When you have two things happening at the same time, it's hard to distinguish where the effects come from.

I could see that. Wii owners tend to be less "hardcore", meaning gaming is less of a priority, and those looking for one would be more willing to wait out a purchase. It'll still beat the crap out of the 360 and PS3, but owners of those consoles are committed and tend to consider gaming their primary means of entertainment, and thus less likely to cut back on software purchases.

I know this is a popular belief, but has anyone demonstrated any evidence to support this?

Having crunched the numbers myself, the typical Wii owner isn't that much different than the typical PS3/XBox 360 owner and they are buying a new game for their system (roughly) every 2 months.

Where did you get this myth from? Look at the sales of the casual games on the Wii. They have legs and have been selling like crazy. No study has been done to conclude that casual do not by games. The Sims by EA is a causal game that has sold more than 30 million units. Casuals do buy games. If they did not then there would not be a market for them on the PC or on consoles.

as this economy keeps going to the crapper, the systems with the price at the right amount ($199.99 and below ) will be fine, the systems with a price above that could be in for some serious trouble.

 So that's why 2008 world wide sales were equal between the 2...

I'm not discounting the effects of the 360 price cut. It certainly had a great effect on the 360's sales. However the recession prevented Sony from responding to that cut. If the Yen's value versus the Dollar/Euro was typical. Sony's profit margins would have been much higher and it would have allowed them to cut the PS3's price in response to the 360 price cut.

I think your point is valid for the future, but not necessarily for the present and recent past. Sony has been telling investors for more than a year that the focus at SCE is profitabilty, so a price cut before the holiday season was unlikely anyway. What's more, it only became clear that PS3's sales were suffering late in the holidays, they wouldn't have reacted so fast.

Not only that, but the currency collapse happened later than 360's price cut. If Sony was going to cut PS3's price in response, they would have done so anyway (and would be suffering extremely heavy losses now).

To be clear, my point is that I don't think PS3's lack of a recent price cut was a consequence of a recession. However I agree with you that it will be the case in the future throughout this year.

We are back to 2007 and "Wii will reach Gamecube sales and Die" Again?

Wii's bubble was supposed to burst hundreds of times arleady, as predicted by the "HARDCORE!" gaming media.