Chris Merris of CNN presents, in an August 24th article, a great look at a possibility that several in the game industry have proposed. Is Sony bluffing about how expensive the Playstation 3 will be?

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The Technology Suits looked into the business strategy of a move like this by Sony and think that it is quite reasonable. If Sony is playing a “bait and switch” game with the price of the PS3, will it hurt Microsoft and the Xbox 360? Not likely.
Even if the PS3 does release around the $300 price point or even less, Microsoft is still in a better position by entering the next generation race 8 to 12 months before the competitors. Console manufactures have historically sold each console at a steep loss per unit, where console licenses for each game sold on the system bring in significant revenues down the line. Many analysts have claimed that Sony in fact often sells hardware at a loss to maintain brand strength and market share, with Sony’s video game revenues and movie divisions subsidizing at least portions of the hardware businesses.

Early adopters and many hardcore gamers will no doubt buy the Xbox 360 at the proposed $300 and $400 prices, and the more expensive bundles of games and accessories will likely increase the overall stigma of a “must have” item. This higher price point will lessen the loss that Microsoft experiences form each console sale and help the bottom line.
When the final pricing for the PS3 is announced and it goes on sale, Microsoft will be in a position to decide whether or not to drop the price to be more competitive with Sony’s release. Plus, Microsoft will have many months to monitor consumer views on the high prices and new technology.
By moving first, Microsoft may be in a position to manipulate the 360’s price to track closer with consumers’ willingness to play and maximize revenues, but Sony will have the extra time to learn from Microsoft’s mistakes, as will Nintendo with the Revolution (We have not forgotten it and are excited to hear more details on the Revolution.). While the PlayStation 3’s hardware specs may be fairly locked down, Sony can continue to tweak the software offering with the console such as media center functionality, DVR capabilities and integration with other digital services.