Instead of lowering the price of the PS3 (Sony is losing like $100-200 [lets say 150] on each PS3 x 3 million [give or take] = 450,000,000 in losses so far from the PS3 console). What Sony should be doing instead is what Microsoft is buying out the major developers for their exclusives. As long as there are great games for a console, people will dish out the cash for it, without the games no one will buy the console, no matter how cheap the thing maybe. Perhaps Sony's business big wigs are totally oblivious to the things that really matter to gamers.
Lets just say Sony dishes out 10-15 million for each "top class" developer, i.e. Valve (HL2 Orange Box), Ubisoft (Assassin's Creed), RockStar (GTA 4), Konami (MGS 4 => which might go multi console now), Square Enix (FF XIII => future unknown due to slow moving PS3 sales), Epic Games (Gears of War & UT3). If Sony were able to acquire the exclusive (as in, it ain't on the 360) on that caliber of games on its console, people would flock to buy its system regardless if it were 599 or 499. The situation however is the reverse, not only does Microsoft pay out handsomely to developers that make exclusives for it $50 mil to Rockstar to add new exclusive content for it for GTA 4 (*which is probably more than they [Rockstar] would make from just selling the game itself), speaks as to the extent at which Microsoft is willing to go to screw Sony over this console generation.
PS3 is a great console, there is no denying that. In fact, the system itself is in many ways it is superior to the 360. However from a gamer's standpoint, its higher cost and lack of exclusive games will definitely end Sony's dominance in gaming.
Sony will win the Bluray vs HDDVD war, but the cost is the demise of its gaming division, which in my opinion is totally not worth it, as the Playstation series has been one of the greatest assets to Sony.
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