Merrill Lynch predicts that next gen component costs will result in Xbox 360 selling at half the price of the PS3 by end of 2006. They’re blaming this primarily on Cell processor and Blu-Ray costs.
Inelastic fan demand and the forces of “luxury branding” notwithstanding, this prediction (if true) implies a serious advantage for Microsoft. Remember the famous Nintendo GameCube pricedrop to $99 — pretty much saved that console from failure.
