That still doesn't address the problem that cutting prices will shrink profit margins or lose money. If you're constantly cutting prices, you wind up becoming more like Dell and less like Apple. You lose control of pricing as your product becomes a commodity.

Good I hope so. I thinking about investing in the HD-DVD player for the Xbox 360 now. But I need a HDTV first.  

Honestly, I don't trust analysts' estimates on the price of systems because they assume far too much ...

Personally, I think it is realistic to expect that Sony priced the PS3 at $600 because (over the 12 to 18 month period where they anticipated the PS3 would be sold at that price) they expected that their total cost would be lower than their total revenues. I imagine that the $100 price cut (to $500) and a potential additional $100 price cut (to $400) would represent real long term losses regardless of whether their manufacturing costs had come down.

I have to agree with Pachter. If Sony does not drop the price to 399 for MGS4 they are going to be making a huge mistake. They have got to get the price to 299 by next winter if they want to have any chance at keeping the market interesting. Without the move in march or april 360 and Wii will just be to cheap to pass up for everyday joe. With the huge push for Blu-ray by Disney, Fox, and Sony this winter combined with the looming 2009 digital signal people will be paying a lot more attintion to HD next year. Common sense says Sony must drop the price next year, and that the PS3 will start to put the pressure back on Nintendo and MS. However this is not a world of common sense and Sony has proven they know how to F*** up even the simpilest things, so as always we will just have to wait and see.

At this rate I will buy one @ $279 in 2009 ....

Except there are no solid sources for how much Sony is making or losing on either of the PS3s, just vague assumptions made by market and hardware analysts.

I'm surprised nobody has mentioned Pachter's August estimates.

Wii: 420,000
PS3: 150,000
Xbox 360: 240,000
PS2: 225,000
PSP: 210,000
DS: 400,000
GBA: 75,000

FishyJoe said:

The problem is that neither HD media is really taking off.

http://arstechnica.com/news.ars/post/20070906-battle-between-blu-ray-and-hd-dvd-fizzles-as-consumers-watch-and-wait.html

Y would I buy a hd blu whatever dvd player for $300 ... when i have 1 that still works perfectly fine?

Same goes for tv's. If it aint broke, don't fix it. I can't tell the difference in quality of dvds(besides bootleg dvds) enough to pay the extra money they're asking.

Patchter hates the ps3.

 and these are bad why? they arent biased at all.