Console makers don't worry about the short-term when it coems to profits. They usually sell them at a lower price than it costs to make them, so they can make profits in the long-run. The PS2 took 3 years to begin making a profit, and I'm not even sure if the XBOX has gotten to that point yet. I'm happy Sony made the price cut, and hope they can do the same in North America and give a similar price cut to the 60GB version as well.
Saw on Google News today that Sony cut the announced price of the upcoming PS3 by 20% in Japan due to vocal consumer and media complaints that the system is too expensive (to 49,980 yen, or about $430 for the cheapest version). In the meantime, the lower model will also get an HDMI port.
Guess Sony had to tell that old bottom line that it's gonna hurt a little MORE; naturally, Sony's stock was trading DOWN on the news. Wonder what'll happen with the U.S. market; Sony (so far) hasn't released any pricing reduction information here so far. I'd say to better you chances, all you PS fans better start firing off some nasty emails to Sony if you want them to lower the price here as well.

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