In US, PS3 launced at $599, is now $299...$300 off in ~3 years (highest priced model).  For comparison the 360 launched at $399 (elite launched later at $479) and is now available for $299 (again highest priced model)...$100 to $180 off in ~3.5 years.

As I don't live in Europe I won't pretend to know the price drops there, but in US, Sony's price drops have neither been small nor slow.

Sony launched with a lot of features and a very high price.  The machine was ahead of its time.  Sony preferred to keep the price high to limit losses, and wait to open itself to the mass market later with to price cuts.  Sony could afford to wait to cut the price, because its technology was so far ahead of its time that the risk of obsolesce was non-existent.  Plus if Sony took a larger loss and sold it at a competitive price, each price drop would no longer serve as an incentive to buy.  Also, there  is no way the expanded audience of casual gamers who may have bought the console at a lower launch price would buy enough games to make the price cut worth it for Sony's losses.

The machine has so much staying power that Sony can afford to slowly cut the price, increasing its sales in intervals and ultimately finishing ahead of its direct HD competitor.  The fact that Sony still has room to cut the price and blu-ray will only get bigger, along with its increased reliability, virtually guarantees that Sony will finish at least in second this generation.  I would give the Wii the edge over the PS3, but with its staying power, it isn't out of the question that the PS3 can close the gap at the end of 10 years.  Nintendo has built up such a large lead, that even though it lacks the staying power, I think Sony may not catch it.  But for making a HD console, Sony had the right strategy.  And Sony already had a successful standard definition console with the PS2 so making another SD console would lead to market saturation.

Sony launched with a lot of features and a very high price.  The machine was ahead of its time.  Sony preferred to keep the price high to limit losses, and wait to open itself to the mass market later with to price cuts.  Sony could afford to wait to cut the price, because its technology was so far ahead of its time that the risk of obsolesce was non-existent.  Plus if Sony took a larger loss and sold it at a competitive price, each price drop would no longer serve as an incentive to buy.  Also, there  is no way the expanded audience of casual gamers who may have bought the console at a lower launch price would buy enough games to make the price cut worth it for Sony's losses.

The machine has so much staying power that Sony can afford to slowly cut the price, increasing its sales in intervals and ultimately finishing ahead of its direct HD competitor.  The fact that Sony still has room to cut the price and blu-ray will only get bigger, along with its increased reliability, virtually guarantees that Sony will finish at least in second this generation.  I would give the Wii the edge over the PS3, but with its staying power, it isn't out of the question that the PS3 can close the gap at the end of 10 years.  Nintendo has built up such a large lead, that even though it lacks the staying power, I think Sony may not catch it.  But for making a HD console, Sony had the right strategy.  And Sony already had a successful standard definition console with the PS2 so making another SD console would lead to market saturation.

If these are slow price drops it should be amusing to see fast price drops.

Okay, the PS3 is a good console, but this posts is full of fail. Sony kept the price to limit the losses... Well since the PS3 launched, the division lost 4.7 billion USD. That is quite a number. And this is limited? The losses ONLY made by the PS3 are probably around 6 billion. 4.7 reported + the profit of the PS2 and PSP for 3.5 years!

Sony MIGHT make it to 2nd place, but this won't change anything. The PS3 is a financial failure. Sure a good gaming-system, but for Sony it is a failure. Nintendo is printing money, MS is making a profit for more than 1 year now and in 1 or 1.5 years, the Xbox360 will be a profitable product overall.

There is no chance, that Sony will cover the losses made (and still making) in the future.

Believe me, if Sony had the chance to create the PS3 again, they would change their strategy.

If you look at this gen and you had to chose one loser, it would be Sony.