Originally posted by: BornStar18
Originally posted by: BigJ
If they sacrificed profit today, they could essentially crush Sony right now and it would probably result in greater long term profits.
If the Elite was $400, you throw in the HD DVD drive to get $600. For the same price as the 60gb PS3, you have a system with a vastly superior game library, better online play, larger hard drive, and some great features around the corner (like IPTV). Not only would this dissuade people from buying the PS3, but it would result in even less exclusives for the PS3. Sony would be pretty much dead in this generation of the console wars.
Instead, they choose to price themselves right along the PS3, where to people considering a system in this price range, the PS3 looks like a better deal. Home is coming out in the fall, and in the mean time the PS3's library is greatly expanding. It's just a dumb move on MS's part.
To add to that, BR is pulling away right now over HD DVD, and keeping the PS3 competitive is only going to help. There's a reason why BR made such great leaps in terms of market penetration and disc sales once the PS3 was released.
While I don't have answers to all of your points, I would first of all like to mention that I'm sure Microsoft has done extensive research on this point and has determined that it's in their best interest not to drop the price. Also, the advantages you mention at a $600 price point (Elite+HD DVD) are still advantages at the $679 price point.
Around the same time Home comes out for the PS3, Halo 3 comes out for the 360 which will be huge for the console. At this point I expect Microsoft to ride the Halo 3 launch out with their current prices and then reduce after the holiday season is over. It makes the most sense for them.
I think one final thing you have to look at is Microsoft as a whole. Microsoft is a company with extremely deep pockets that has to be careful in everything they do. They have enough money to just about hand out consoles to everyone that wants one and attempt to gain the expense back through games and peripherals. You can bet that if they were to do that they would get hit with one antitrust lawsuit after another. Sure, they could crush Sony at this point but a lot of courts would probably see that as anti competitive.
At the $679 price point, you're $179 over the cost of the PS3 20gb. Add to that is you can use pretty much any SATA hard drive you want in the PS3 instead of having to pay for proprietary parts. Also, I didn't even get into the wireless issue, which will cost you anywhere from another $50-$100. So that $679 becomes $729-$779.
At the same time Halo 3 comes out, the PS3 is coming out with their exclusive Heavenly Sword, which is being looked at as one of THE games to get for the PS3. The launch of that game is going to be huge. Couple that with GTA IV coming out for both systems in October, and the wide selection of titles that are going to be released until then, and you lose a huge advantage you have over the PS3. Sony is not just sitting around, and you can bet they're trying to implement features such as IPTV, especially since they consider the PS3 not just a gaming console, but a media center. You also have the exclusives that Sony is picking up, like the 3 titles they're developing with Namco. And for a lot of us, Square-Enix is a huge, huge reason why we'll get PS3s regardless of the price points of the other consoles. They typically put out exceptional games, so with their exclusives for the PS3 and possibly Wii (I believe they have games in development for the system) you're looking at another obstacle the 360 is going to have to overcome.
Also, the 360 is basically a dead console in Japan. Sony is still selling a good amount of of PS3s there and this will only help them stay alive. So the 360 sales in the rest of the world have to make up for that market.
And as far as company research, don't give them too much credit. I'm sure Sony did plenty of research considering making BR optional, but they still didn't do it. While it's helping them win the format war, it's killing system sales overall.
As for the anti-trust concerns, it's absolutely garbage. Nintendo is crushing both consoles in terms of pure numbers since released, and while I personally find the Wii-mote a novelty at best, it should continue to remain strong as the game library increases. Sure Microsoft has deep pockets, but you can only bleed so much from a sector before it becomes a better financial alternative to pull out all together. Dominance in one generation does not result in dominance throughout the entire span of video-gaming. MS would have to do the same thing each generation, and that would be suicide.