How does the well known facts about the relative 360/PS3 performance in Europe and an anecdote about your local store prove me wrong?

You're making some serious assumptions here. Theres no assurance than the PS3 will reach the $299 price point this year. Its what you would like to happen, but its not assured that it will happen. Also even if the PS3 reaches $299 theres always the extremely likely possibility that the Xbox 360 will reach the $149 and $199 price points at the same time. A $299 PS3 is relatively more expensive than a $199 Premium than it is now at the current prices.

@Squilliam
As I said myself, the one about accessories is an anecdote, nothing more.

But the numbers about hardware vs software sales in Europe prove you're wrong if you state "the console with the fewest sales will sell the fewest accessories and games".

And as for prices, let's not play games here. We all know what happens with prices entering the "comfort zone" for a given hardware piece for the mass public, and about diminishing returns for further pricecuts under such threshold. To increase its sales much more than the 360 the PS3 doesn't need to win a price war, it only needs to bring over enough people that are on the fence at its current pricepoint, but would not be at $299.

(Answering paragraph to paragraph)

Yes I know its a bit early, but I felt it was important to stimulate discussion now to consider the possibility. With so much talk of a long life-span...

I didn't realise that retailers and manufacturers worked so closely together, its an interesting perspective and its definately something that I have to keep in mind.

I think at this point I think its safest to assume that if Microsoft doesn't act first in this regard (If I was them, thats what I would do) they will cut the price quite strongly since its to their advantage to keep their American market and their highest margin market firmly in their control. I suspect in Europe they would be happy to concede a close third. From what I have seen, Sony seems to be more interested in maintaining their 10M per year production rate at this point and that would only require a $50 price cut. Its counterproductive to their interests IMO for them to cut the price by $100 as that would simply invite Microsoft to cut equally strictly and incite a price war that they cannot win.

Highly unlike that PS3 is not going to make it 2012. I believe it's gonna go beyond.
Many developers are now jumping to develop on PS3 then porting it to PC and then optimizing on 360. Mostly the multiplatform game demos you are seeing online nowadays are PS3 versions, of course they won't say it's PS3 version in NA and EU. But in Japan, if you understand Japanese all their multiplatform game commercials will always feature PS3 version 1st, then put a also available in 360 in the end of the commercials. They don't really care if it makes a fanboy war, but they rather show the truth than mislead.
With the Blu-ray being the chosen media of storage for HD game and movies, I highly doubt PS3 will go away. There's still more the BD can offer w/c the DVD cannot.

A price cut will ensure massive PS3 sales in Europe, the being reason is this, price for the PS3 is almost the same as NA price. When they launched PS3 in EU the price is 699 euros, that's the same price launched in NA $699. It didn't surprise me why the PS3 didn't sell that much. Sure, M$ and Nintendo will follow price cut, but the thing is most people already have them. So they'll buy the system they haven't own yet w/c is the PS3.

In this case Europe doesn't factor into it, and theres one console with clearly higher sales than another. By a factor of 2:1.

We can see at this point that demand is dropping for the PS3. Its evident because the sales its currently getting are lower than the same relative point last year excluding GTAIV. Its all just supply and demand. Demand that in this case is dropping. This is a game with 3 players, two substitute consoles to the PS3 and ones an almost perfect substitute. The price and demand for the other consoles do effect the PS3.

Count out a $299 PS3 at your own peril. You can quote me on this: The only way the 360 will outsell the PS3 after a price cut is with a huge game launch or an equivalent price cut (the 60GB going down to $200).

Given that the Xbox 360 is profitable if you consider this analysis. Its a given that Microsoft could do an identical price cut if they chose and cut $100 off the premium SKU. Also its not a given if Sony would and could do the same, they only recently posted a profit off the entire SCE division and thats with profit from at least the PS2 propping up the numbers.

When do you expect this price cut to occure? If it does not happen until Sep 2010, will it still matter?

@Squilliam
So you made a point that is false in general, but holds for the situation of the last 5-8 months in one market only, and you want to project this contingency forward 3 years barring unknown price cuts, unknown general economics, unknown HD/BluRay adoption, unknown agreements with retailers? :)

I would call such a prediction mostly void of much value, for its method before its content.