[quote name='Apossum']they must be pretty desperate. I think a $200 price drop in less than a year is unprecedented. Granted, it is a different model, but come on, 20gb more and the EE chip do not come out to $200.
This is happening because of poor software support (yes, there are games, but that's not the issue..) and because they alienated everybody. Wii got lucky and jumped ahead based on it's newness and 1st party games, the 360 has had a 2 year head start and a Halo release, and the PS3 is still in "just wait" mode.
they've all but secured 3rd place, imo.[/quote]
Well, I don't think it's quite desperation yet. I'd consider desperation as selling 80GB PS3s with everything in them for $399.99 or less. I believe they have been planning this for some time--trying to redesign the system in ways to cut costs and get something more affordable out by the holidays because they need to put systems in peoples' homes. I also think the timing is no coincidence either. First a cut on the 60GB to clear inventory and keep sales flowing, then the "real" drop with the slimmed/stripped down sku to push consoles during the prime game/entertainment buying months.
In a way, this whole thing tells me that Sony is doing everything it needs to do from a business standpoint.
Obviously, they took a huge gamble by trying to hit the $500-600 price point. And clearly, they underestimated Nintendo's success and paid for it. But it's also clear that they realized this pretty early on and have been actively working to improve their situation without compromising too much of the original business plan.
My only question now is if Sony is working on better software libraries and tools to help speed development times. I really think they need this just as much, but obviously getting more systems into gamer's hands is the priority right now.