The problem, as I've stated before here and elsewhere, is that if they drop the price before manufacturing and component costs have been reduced by a certain amount they risk the PS3 being a never profitable venture. I forget the link but I've posted it a couple of times here where a Sony executive from Japan has stated the projected profitability for the PS3 is from it's fifth year out. I'm going to say that assumes at least one third of the console games market is captured by the PS3.
At least one has to assume that considering the price of the console and the dollar amounts being flushed down the drain to get the consoles out. I would certainly say it isn't projecting Gamecube like sales figures or marketshare for those projections. If you drop the price too fast too soon you risk the PS3 of not being a five year from loss to profitability venture but push it to six or more years out.
And yet if you don't drop the price of the PS3 the current sales figures by a decent amount any time soon...
the tepid sales will certainly ensure you never make a profit off of the PS3. I've been a fan of Nintendo for long and long but I go where the games and where I think my money is being well spent for the maximum entertainment of myself. It's why I've owned nearly all consoles to date at one point or another and even had a Neo Geo system but if the PS3 doesn't drop down to $400 (or hopefully lower) then I'm not biting.
I just don't feel what it's bringing to the table over the Xbox 360 and Wii (both of which I have in my house) are worth the price premium. There lies the major major concern of Sony. No one argues the PS3 isn't a powerful console.
Joe Consumer just does not see what value there is in such a system that would justify it's price over the competition. The ball was in Sony's hands. It promptly dropped it like it was a lead balloon.
And much like how Nintendo dropped it in years gone past, it was due to hubris. Nintendo at the time thought it could do no wrong. Sony also thought it could do no wrong.
While I have no doubt Sony is not out of the game even if the PS3 is a total failure it doesn't bode well for Sony as a whole. This might even be a good thing overall for the games industry. Hopefully this will promote more investment towards new gaming concepts and innovative ways to play games from not just Nintendo but from Sony and Microsoft as well.
And that's the silver lining even Sony fanboys should be looking at. The problem, as I've stated before here and elsewhere, is that if they drop the price before manufacturing and component costs have been reduced by a certain amount they risk the PS3 being a never profitable venture.
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