As expected, Sony has beat Microsoft to a price drop, slashing the Playstation 2 price to $199. The original Playstation will be cheaper as well, as the price there is being cut from $99 to $49. Looks like Microsoft will have one hell of a time catching up if they don't announce a $100 price drop themselves next week at E3. Can they afford that though?

"'This is really a price cut that will hurt Microsoft more than it will hurt Nintendo,'' he says. ''Nintendo is already at $199 and is making money (on GameCube systems), and they can cut the price $50 if they want to. Microsoft still can't make Xboxes for $299, let alone discount them.''
Sony has sold nearly 10 million PS2 systems in the USA in the 18 months since it hit the market -- a rate that is more than double the sales rate of the original PlayStation. Microsoft has sold more than 1.8 million Xbox systems since November; it had a week's head start on the Nintendo GameCube, which has sold more than 1.5 million, according to The NPD Group.