All depends, if Sony think the extra software sales they get from those new to the console covers the $100 on average then yes of course. Hope that makes sense. :/

The first/second party releases this year are Infamous, Uncharted 2, R&C and possibly GT5, December or March for that one. No way at all do I see the price cut not taking place for the release for the game, if anything it will put PS3 right back up there in front of 360 in EU.

It's not impossible, but I think if there is a price cut this year it will be only by $50, some people say that is not enough to make a difference in sales, I say it will make a difference in sales, plus I don't think Sony can go lower, but like I said, I think it is possible that we will see a $299 PS3 this year.

also sony gets money from software sales.
psn store, etc etc.
that offsets the losses.

even with the huge depression gaming division managed to get a mere 4 million in Q4

One word: recession.

+

Gran Turismo 5, not this year.
God of War III, not this year.

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Do you really believe Uncharted2 and a new Ratchet will cover the ENORMOUS hardware loss (given there will be a 100$ pricecut)?

GT5 is guaranteed to sell millions but a driver probably isn't going to move a lot of consoles. I'm not expecting much for the other Sony games you mentioned and they probably won't outsell their predecessors in life time sales. The biggest thing that can help the PS3 is a price drop. That's the only thing that has kept Sony from winning this generation.

GT5 will move consoles in EU, rest assured that will happen. What I am saying is that it's the big one Sony has, they will want the game to sell as many copies as possible. $100 price cut + GT5 will cause a whole lot of people to get the console. The price cut will be the main cause for the increase in sales but Sony constantly churning out these exclusives will cause many to purchase the console.

Question is will Sony think the increase in software sales will break even with the $100 price cut. My guess would be yes, upcoming full prices games + the backlog will easily cover that $100 per console. You will have those who do not get many games but you also get the loonies whom get many, Sony need those to have the console in order to play the games. :O

GT5 may move some hardware... but nothing can help as much as a $100 price drop. I'm guessing GT5 and a price drop will coincide and that would defnitely be big for console sales.

The thing is that the bottom has fallen out of commodity semi-conductor markets due to the recession. Many components are now a 1/4th the price they were a year ago. Everything is so volatile that I wouldn't rule out the possibility.

In response to the $50 price cut remarks

Personally, as a consumer $50 off the current price of $399 does not mean anything. At this high of a price $50 is not enough to sway my mind on something that I am only slightly interested in. The only time a $50 cut would push me is if it was a limited time deal. With that said I would really hope they don't cut it by only fifty if they do a price cut this year.

On Topic:

I think Sony can get away with the current price if they can come out with some more non gaming incentive to sway people that are on the edge, but want more than just a gaming machine. This would mean taking the potential losses of a price cut and marketing these new features, and current aditional features very heavly over the winter. If I was at Sony this would be the route I would take.

However, a cut off $100 around september would not be a bad idea either. It really just comes to what they want Sony wants.

Danyone is wrong. No price cut. Sorry.