Personally, I believe this is true.
PS2 sales are finally drying up at over $100, so I've been expecting the price drop there.
Putting PS3 at $500/$400 is tantamount to an actual price drop - since Sony launched at $600/$500 in the eyes of consumers.
At $400/$300 last year Xbox 360 did 1.6 million in the USA over the holidays (Nov-Dec). At $500/$600 Sony wasn't really going to go north of 1.0 million in the USA over Nov-Dec combined (I had it pegged at 840k in Dec, 360k in Nov).
At $400/$500, PS3 can probably do 1.5 million to 2.0 million in Nov-December (I'd guess 550k Nov/1100k Dec). Although I think Wii can do 2.25 to 3.5 million in Nov-Dec (I'd guess 1000k Nov/2000k Dec), and I think 360 can do 1.75 to 2.5 million (I'd guess 650k Nov/1300k Dec) depending on when most people buy it for Halo 3.
At $99, I'd also like to point out that PS2 will probably sell more than PS3 again, and it may outsell 360 again over the holidays. It can probably sell 1.5 to 2.5 million units (I'd guess 750k Nov/1150k Dec), but will likely be flattish over last year due to the price drop offsetting natural declines. PS2 probably has a 1 million unit holiday left in it in 2008, before finally dying off completely in 2009/2010.
You still have to wonder though, how many games are so good people will spend $400 for a console, when Xbox 360 is cheaper? 360 has Halo 3, Call of Duty 4, Rockband, all the big multi-plat PS3 games with a lower entry barrier.
Sony I think is willing to sacrifice some cash to maintain marketshare, but I think PS3 is going to have 'PSP syndrome' this holiday season - fairly respectable hardware numbers at the lower price - but not a ton of software sales.