This isn't really brain surgery to figure out. Sony created a powerful system that is very difficult to program for. That means, the cost for development is much higher than expected, while console sales are far below the original estimates.
So, the developers are not making the profits they expected on the PS3. A price drop would spur sales quite a bit -- everyone knows it's necessary, it seems ... except Sony.
the price drop would be made up by additional revenue from games sales ... unless they are losing WAY more per system than they've ever admitted
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