Well, if you are asking if the PS3 can rebound from its current position and reclaim the title of "console king", then the answer is no. The Wii is so far ahead of everyone (except the DS) that no practical pricing by Sony or Microsoft will ever dethrone it. If you are asking, in the slug-fest between the PS3 and 360, would a cheaper price help the system firmly take second place*, then the answer is probably -- with time. Bringing a stripped down version of the console to market that runs somewhere between the 360 Arcade and the Wii would entice those consumers on the fence still to take the plunge. But, as it has been mentioned by others, Sony has their 10 year plan. I think, much like the PS2, long after 360 owners have upgraded to the next new thing, the PS3 will be chugging along. Over time, it will likely outsell the 360, globally. Of course, you can ask, at that point, does anyone care? Who cares who was the eventual (second-place) winner of this console generation when the next has started? Maybe, it will mean something to investors...who knows?
Is a price drop, at this point, feasible? I'm sure my information is a little old, but last I heard, the cost of a PS3 to manufacture was down to $449.00. I assume that is the standard 80 gig version. The Xbox 360 announced late last year that it is now being produced at a profit (probably the premium kit). Both companies' gaming devisions are running in the red, and will probably be so during this entire generation. Somewhere, next generation this generation may climb into the black, but only when the systems are selling super cheap and all games are retailing for $20.
I think a price drop for the PS3 will come before E3, but don't expect it to make a huge difference in things for a long long time.
*"Second place is just the first place loser"~Dale Earnhardt
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