xbox360 is dramatically dropping their prices. If ps3 doesn't budge their price they are going to loose.

MS is following Ninty and Sony's strategy for killing the saturn. The saturn was too expensive to produce, so Ninty and Sony lowered the price of their systems so low that Sega couldnt afford to equal the price point. Thus killing off the Saturn in like 97.

It will be interesting to see how Sony keeps gamers interested in buying a console with less games for more money.

The ps3 will have to drop prices before the holidays season to stay up and not look over priced, like it did when it launched. But sony lowering the ps3 price hurts stand alone blu-ray players and so risks killing any sales they might get.