Yeah, in the long term a mere $100(Expected price drop) can make the PS3 more desirable over the two other systems. Lets look at the PS3 and X360.  In Canada the PS3 is $399. After the drop $100, its $299. $299 PS3 vs. $299 Xbox Pro(60 GB).. Its going to take some months, but people are going to start to see that the PS3 is going to be more desirable console.

Fair enough - care to list what these things are? The only definite advantage the PS3 has is the BR player, IMO - is that enough by itself?. Its games & other services aren't that much more impressive than the 360's, otherwise it would've probably caught and passed it by now.

Also - the PS3 has had a single official price drop, fine. But I'm pretty damn sure that that drop wasn't 200$, 'cause that would've seemed desperate to everyone else. I honestly can't remember - did they just terminate all their more expensive SKU's to drop the price (which could be counted as drops)? Wikipedia talks about a series of price revisions, that's why I'm asking.

If a 400$ PS3 was outselling 360 last year for first 8 Months, what would a 300$ PS3 do? And no, people's perception are not set in stone, Momentum can change in the blink of an eye

This article is a very plausible scenario, and probably the likeliest one. The best case scenario for a PS3 price drop this late in the generation is a reversal of fortune with the 360. It isn't going to do any better than that, and won't ever approach Wii-like global sales. The article is basically saying that it may be able to match 360 sales, which would still leave that 8 million gap to overcome. It's not definite, but it's hard to disagree with how likely that is.

Anyone that thinks a $100 price drop is going to put the PS3 into Wii territory is a loony.

You must mean in the US (the rest of the world sales per region favors the PS3).  And, the gap is 7+ million...not 8+ million according to the last official report.

PS3 sales would increase to 360 levels.

Ms drops Xbox price by same amount, 360 pulls ahead again.

Nintendo does nothing.

Wait 1 year, then repeat until next gen.

1)Blu ray & games released on Blu Ray discs instead of a DVD.

2)Hard Drive: Its price freedom on the PS3. You can probaly get a 120GB hard drive for less than $100. A 120GB 360 Hard drive is over $100

I cant get into a techincal discussion cause I dont have logic in that area. But, I'll say this and I will leave it at that. I see a difference in PS3  exclusive  games then Xbox 360  exclusive games. RE5 may look the same on PS3 and 360. However,  I think KillZone 2 looks way better then RE5 on both systems and KillZone 2 looks way better then Halo 3 & Gears 2. Services, never tryed "live", but I think the online play that Sony offers on the PS3 is great and Home looks real intresting. I still havent see videos or people talking about a Home like clone on the 360.

The only problem I have with the article is the assumption that the PS3 is automatically a better value (I can only imagine they mean due to inclusion of blu-ray and wi-fi).

I simply don't think the general public is concerned with wi-fi and blu-ray... IF they are in the market for a video game console. NOW for the group of people who are looking for both a video game console and a blu-ray player, yes it is a better value. But that is a subset of the market (and a small one) not the entire market. Assuming that everyone wants to upgrade to Blu-Ray is a bit too narrow minded for me.

Otherwise I honestly have no idea how a price cut would affect sales...I'd guess a big spike up front for those who were waiting to get one, with a gradual decrease to slightly below 360's sales (economy is bad just about everywhere).

A price cut would only mean that sony would be selling the ps3 at a higher rate of personal loss. It still costs more to make the unit than what they sell it for.

And you know as soon as sony drops the price, MS will do that same.

You're wrong. There are millions of people waiting for PS3 to be cheaper and then buy it. Wii is not growing as much as people think toward kids. For exemple, i know a lot of 10 years old kids who say "Wii is for queers" and they want a PS3 so bad, but its expensive.