Just read about the PS2 price drop and I was A little surprised really.

I mean in current economic circumstances I would have thought they would have been trying to promote the PS3 with a price cut.

Instead they cut the PS2 to under 100 bucks.

I just have to wonder are they actually helping to undermine the PS3 themselves?

Either way I would have to say it was a surprising decision considering present PS3 sales.

I actually thought they were going to announce the end of PS2 production.

Anyway who am I to question these wise men or women.

Still it does make me wonder how much faith they have in the PS3.

I think they have lots of faith in the ps3. Too much if you ask me.

They figure that the 399 price keeps them from losing money and the market share lost is something they can gain back. They think that the power of Teh Cell and bluray will lead the way for when the price does drop. Only time will tell...

Has nothing to do with faith and everything to do with making a profit. They arent going to cut the price of the PS3 until in makes sense finacially. Which it doesnt right now. They have faith in it, look at all of the exclusive games coming out for it this year and the beginning of next year. If they didnt have faith in it, would you see that many games coming out?

They either lose money or barely break even on every PS3 sold.

Even at $99 their selling PS2's at a profit.

To a small extent they may be undermining PS3 but at the moment, Sony needs to be generating more profit not more losses.

wat does it cost them to make the ps2?

there undermining the ps3 right now b/c they want the ps2 to last a 10 year life wait till ps2 hits 10 years old then theyll get aggressive with the ps3

Just seems a little odd to me.
I mean surely you would want to be investing all your resources in the latest product rather than competing against it.

QFT

^ me too. But I know they can't afford to drop the price of the PS3 rt now

Based on Koller's interview with Gamedaily,

" we do think the $99 price point could steal some share [from Wii] "

it sounds like Sony want casual gamers who are looking for a console to look at PS2 vs. Wii, since Sony has a better chance of making a sale there than in the dichotomy of PS3 vs. Wii.

And then,

" if someone purchases tomorrow for the price drop, then we believe that's a PS3 owner in the future. It may not be April 2nd, but it will be in the future. By definition, they're a bit of a later adopter, so that's someone that we think will gravitate towards PS3 as we continue along the growth curve "

they hope that late in the PS3's lifecycle these same casual gamers will make the upgrade to PS3.

These aren't two competing product lines.  They are catered towards different audiences.  They are right,  someone purchasing a PS2 (Now) is a late adopter of the product.   IMO,  Sony hopes to have a high quality exclusive lineup and a lower entry point in a few years making an easy choice for consumers to upgrade to.