While it isn't hard to deduce that fact, since Sony cannot cut the price now, and getting the price down will be the most important thing they do.
However, I still believe it will be an uphill battle. Microsoft has been earning profit on the 360 since day one (obviously at the expense of hardware quality). Sony will have to cut the price drastically to get to the point where MS cannot respond with an equal price cut on its Elite model (the only truly comparable 360 to the PS3).
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