The point i'm making is that Sony as a big corporation does not have the same restrictions as an individual. The can raise money in many different ways to fund such a price  drop. they can go to the bank or the capital markets, investment banks, government, shareholders etc.

It is not a matter if they can afford it or not, of course they can since the only constraint is cash (i.e. Amazon which made it's first profit several years after it launched and yet is could still "afford" low sale prices).

The only thing Sony will need to consider is if it will be profitable in the future. (i.e. get the money back later through software/accessories)

Should it happen for Sonys sake? Maybe

Will it? Depends if it's feasible

That's not what I said, and it's not what I believe.

I'll explain again. By doing a price cut, you're not just increasing sales and taking a loss on those additional sales, you're also getting less money from the customers who would have bought the PS3 without a price cut.

In my example, that number was 9 million (feel free to replace with whatever sales you think PS3 will have this year if no price cut is done). With a price cut, these 9 million will still buy the PS3, but each of them will give $100 less money to Sony. Resulting in a total of almost $1 billion, which is the money lost on hardware sales to those users. The 3 million who buy the PS3 because of the price cut have to make up for that loss, to the tune of $333 each in this scenario. I'm not even counting the losses on those 3 million consoles here since I don't know the manufacturing price...

That's how a cost/benefit analysis is done (although a rough one). You have to look at the two scenarios, with and without the price cut and see how much money is lost or gained in total. The additional users have to pay for the cost of the whole price cut, not just the cut on the consoles they buy.

^ That is true, however i wouldn't find it impossible for users to provide $333 extra revenue for sony until the end of PS3's life....

True, but many of those will still buy the PS3 and provide that revenue later if you wait longer before cutting prices.

Price cuts are good for boosting sales and gaining market share, but profitability wise they're quite hard to justify unless demand is very low.

going by it previous price cuts they were all 100$ i think it would be the only move for them to get back in the game

So yeah i think that around November they will cut the price to 300$

The 50$ cut is guaranteed to happen i would be shocked if there were no price cut this year for the ps3

Not entirely true, since the 9 million who would by the console anyway would probably spend some of their extra money on a game or accessories. Let's say they would spend 50$ of the 100$ "saved" on Sony. That means that the 3 million new customers should make up only 183$ each.

i think there will be a price cut around november in time for christmas

From what I know when my girlfriend used to work at Bestbuy was that things like gaming consoles, iPods, PC's, some brands of Televisions (namely Sony brand) are all at contracted prices. These are sold for what the retailer bought them at. The money is made from game sales and accessories.

An iPod that costs $150 was purchased by the store for $150. Ipod headphones that were sold for $30 were bought for $3.

Someone would need to provide some more info but as of now this is how I have always known it to work. Bestbuy has an employee discount that is you pay 5% above what they paid. Video games end being about $10 less while consoles do not get discounted at all. A samsung HDTV that costs $1000 you can buy for around $550-600.

That is how I got my HDTV for $300. The Sony HDTVs wouldn't get discounted because if they did, Bestbuy would be losing money.

No. PS3 will stay at $400 forever.
MS are the only ones who can afford a pricecut right now since they have infinite money.