[quote name='nintendokid']There was a demand for the system - the demand was to turn back and resell the system. Resellers DON'T KNOW SHIT - they are not you and I who visit game sites all day to discuss, they are John and Jake from next door. They know Madden and they know Resistance. They also know that the PS2 sold for a fine return back in 2000 but that was when PS2 undisputedly ruled the market. They don't take into account how the Wii would affect PS3 sales and demand (and we already see how that went down) and how Gears of War, ultimately already sold 2,000,000 last week, affects the PS3 demand.
There was a demand for the PS3 not for the manifest function (to play) but for the latent function (to sell). You said it yourself - "Sure, the price is coming down because theres so damn many online, but thats largely due to media hype."
Media hype? Hype is suppose to bring interest up. I think you are missing the point here, and that is simply this: people just don't want a PS3. The Wii had to put up with everything: "Wii-wii" jokes, lack of advertisement, lack of power, critique against the obscure remote, etc. But they are still selling like hot cakes. Go figure. Face the fact.[/quote]The point was that resellers couldn't resell them if there weren't people who wanted them. No one paid $2000 for one thinking it would go for $4k later. They paid the premium to get the new thing at launch, without camping, and if they had the money to burn, great.
The interesting thing is, though, that there is no demand anymore. In the days leading up to Christmas, the prices should've been higher than ever before, but they weren't, they bottomed out. So, obviously the resellers who bought into the hype got burned.