The only way I see Sony being able to make a PS3 price cut is to just introduce a gimped model. I'm not sure how they'd pull of it off (since they make so many expensive things necessary features), but it would still help. Most people would rather just play some good games at a reasonable price than have a bunch of convenient media features.

In my opinion, Sony's strategy with the PSP should be continuing to make progress in Japan. Every time a dominant console maker has fallen from grace, Japan was the first place to go (correct me if I'm wrong). If Sony ever plans to take back the market, or even just compete, they'll need Japan. No matter how small the market in Japan has become, it's still significant.

Not really.

1. PSP is profitable. With the PS2's price cut they need the PSP to sell even more to make up for lost revenue from the PS2.

2. The PS3 has remote play which could push PS3 sales.

3. The PSN titles available for the PSP will grow meaniing more revenue from there.

4. More software revenue from a profitable system equals more profit.

5. PS3 game videos available on the PSP PSN Store could push PS3 sales.

@above post on Japanese market from you

The Japanese market is turning into a dominate handheld market with a minor console market. It is smarter to push handhelds in Japan and when you have less expensive console push it then. The PS3 sells well considering but its still expensive, push it after a price cut in Japan.

I think Sony sees them as their too childs.If one fails and makes the family look bad then they are  trying to make the other one look good so it will overshadow the failures of the other sibling.

Is the PSP actually profitable? I'd believe it, but I'd like some sources to confirm it. As for the Japan bit, I consider handhelds to be consoles. Always have, always will. Japan has always been a handheld market anyways. The Gameboy is the highest selling console of all time there, and Pokemon the highest selling game. It's just during the PS2 era where the Gameboy Advance was fairly westernized and didn't have as much Japanese appeal (although it still sold almost as much as the PS2).

 GS: So is the PSP's increasing market share one of the reasons behind last month's flurry of PSP software announcements? 

JK: Well, it's certainly related to this announcement. Corporately from a financial standpoint, the PSP has been a high-growth, high-margin product for us. It has, as I mentioned, allowed the PS2 price to drop, and we've had some flexibility.

There's a lot of announcements coming up to E3 and particularly at E3. [Emphasis added.] There's probably 50-60 percent of the lineup for the year that has not been announced and there's some big titles coming. So there's a lot of excitement on PSP

http://www.gamespot.com/news/6207289.html

it very important that sony supply PSP with tons of software, they have lacked that all year. but dont worry, im sure they'll still announce/show plenty of ps3 titles.

Thus the reason Sony needs to focus a little more on the PSP. I believe Handhelds is where the future lies and  the competition is getting fierce, they need to renew demand for it in the western world.

Alright, I think people are getting confused. Let me lay it out for you:

PSP: Sells great (relatively) in Japan, sells a decent amount of software. Sells horribly (relatively again) in Europe and America, and moves barely any software at all.

So the PSP's focus should be in Japan, but Sony should be focusing on the PS3 for the other regions. It may not be the best way to get back into the American market, but it's the best shot they have at this point.

I disagree. I think that the amount of money to be earned on the psp is great. And if you look at its sales you can see that it can move a lot of software when given the support (think Chains of Olymups and crisis core). The psp is obviously very strong in Japan, and with the right push it could be a powerhouse again in Europe and America. Tekken, Rock band, Assassins creed, soul calibur, little big planet and motorstorm are very solid franchies and will help psp do some great numbers this fall. Now add to that a grand theft auto, resident evil, or gran turismo. Perhaps even all three the way they talk about it. That would guarantee an amazing fall for psp, and a rebound in Europe and America. Thats a lot of potential money for Sony. As for the PS3 it already has a great line up for this fall (God of war, Uncharted, ninja gaiden sigma, white knight chronicles, MAG, Killzone, ratchet, and plenty of other titles) for it to do well without any new announcements, which Sony has probably 1 or 2 big ones for it. Plus what ps3 really needs is a price cut, which could be financed by a stronger psp.

I'm sick of PSP news. How about some PS3 news? As if that PS2 price drop wasn't enough of a letdown.