It's outselling the PSP and the X360 also. What gives?

Sony's PS2 is outselling Microsoft's 360.

For Sony there has been a choice: a price cut for PS3 would not only mean more of a loss per PS3 (due largely to the strong yen vs foreign currencies at this point), but it would mean that PS2 sales would probably drop.  They'd be pulling profitable PS2 sales over to the unprofitable PS3 hardware.  But now, especially with the slim, I think the price of PS3 hardware has dropped enough to justify a price move.  This in the face of the strong yen.

It's a good system. If they add a $300-350 model PS3 with BC I think it would sell well.

Good for Sony, they must feel proud.

They never really did. The two most popular consoles last generation were the least powerful (PS2 and GBA), and the highest selling game (San Andreas) wasn't much of a looker.

Actually, the Dreamcast was the weakest console last generation. I see what you mean, though.

I didn't count the Dreamcast because it dropped out pretty shortly, and when it entered the generation, it was pretty damn powerful. Plus, some people would argue that it's more powerful than the PS2. Whatever.

QFT

Playstation 2 will NEVER die! good times lol

Because a $99 price tag with the largest game library known to man makes it an almost necessary purchase.