A cheaper PS3 would help sales a bit, but have many games that everyone wants will help them much more. So basically in 2008 when they will have a ton of great games.
But system value isn't everything- remember last generation? No matter who dropped their price first and who followed, the PS2 and Xbox were the same price, and despite the Xbox having more technology in it, the PS2 destroyed it because it had more popular games.
Hardware= 10%, Software= 90%.
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