Given that both the Wii and Xbox 360 are priced at or below the $299 mark (with the exception of the Xbox 360 Elite), we'd say Sebastian is right to claim that any cut less than $100 would be unacceptable. Taking the current economic conditions into consideration, it's likely difficult for most people to justify the $399 price tag when there are comparable consoles to be had for less.
Sebastian joins a cavalcade of companies and analysts making similar predictions lately, noting that it would be a win for everybody. Sony could push its upcoming first-party lineup into more gamers' hands, publishers would gain a larger audience and retailers would enjoy better margins. Sebastian says that "the next 12 months are critical to regain market share" for the Playstation, especially with demand for the Wii finally slowing down and Microsoft reportedly prepping its own motion control interface. And, of course, with Sony aiming to increase PS3 sales by 30 percent this year, a price cut certainly wouldn't hurt.