We know that the PS3 is relatively expensive for a game console, but how much cheaper would it have to get to change that perception? In other words, is there a specific cut-off where a piece of consumer electronics goes from "unfathomable" to suddenly "affordable"?
Creative Strategies Analyst Tim Bajarin has a theory about that. In a USA Today article yesterday, he says that the average consumer won't pay more than $399 for a piece of electronics, no matter how awesome and must-have it may be. While consumers will make exceptions for high-end items like TVs and computers, smaller items have trouble reaching mass appeal until they drop below $400. "That is pretty much the highest you can get and still have large volumes," Bajarin said.
The article specifically cites the PS3 as a cutting-edge device that has had problems selling above this ceiling. They might not have a problem for long, though, if analyst predictions of a $399 PS3 by April pan out. Hey, if you're going to listen to one random analyst, why not go all the way?