The ps3's price doesn't matter at least not in the usa where its currently third place. The only pricing that really matters is the wii's and since its now trending downward there isn't much wiggle room for them. They have the $150 and $100 price point left. $150 might come this fall so whats next fall ?
For sony and ms if nintendo moves on to another console many of their advantages over Nintendo can be wiped away. For instance a radeon 5670 class video card coupled with a low end dual or quad core cpu will easily out class the ps3 and 360. So for ms and sony it would force their product cycle. On the other hand . MS learned this gen that going first can have its advantages and sony has learned that being a year late is not fun at all. So I'm sure both of them want to be first or at least within a few months of the other.
I have seen this stated over and over again so I decided to do some research and see if the facts support the idea that launching first correlates with the success of a console.
Here are the facts:
4th generation:
console Japan USA sales place
Sega Genesis 10/29/1988 8/14/89 30M? 2
Turbo Graphx 10/30/1987 8/1/89 10M 3
Nintendo SNES 11/21/1990 8/23/91 49M 1
5th Generation:
console Japan USA sales place
Atari Jaguar late 94 late 94 250k? 5
3DO 3/20/94 10/4/93 2M 4
Sega Saturn 11/22/94 5/11/95 9.5M 3
Sony PSX 12/3/94 9/6/95 >100M 1
Nintendo 64 6/23/96 9/29/96 ~33M 2
6th Generation:
console Japan USA sales place
Sega Dreamcast 11/27/98 9/6/99 10.6M 4
Sony PlayStation 2 3/3/00 10/26/00 >140M 1
Nintendo Gamecube 9/14/01 11/18/01 >21M 3
MS Xbox 2/22/2002 11/15/01 ~24M 2
Further I would love to see some analysis on the actual profit generated from a specific piece of hardware - Nintendo was in 3rd place in the 6th generation but how profitable were they relative to Sony and MS in the home console video game space as an example. Eastmen might think that being in 3rd place is a problem but am not sure that any of the big 3 view things the same way.
I think Nintendo has suggested a couple of times that they won't release hardware unless there are specific advances in technology which will translate into better game play opportunities - when I look at this data I tend to agree with that. And for the record the gap between 2 and 3rd this generation is a couple million consoles with the most successful launching at nearly the same time as the 3rd place console did. Launching first might have resulted in sales for MS this generation but how much of that billion dollars that was allocated to faulty hardware was due to the rush? I think the big 3 all look at a variety of factors when they decide to release hardware - the idea that you need to launch first to be more successful is myopic and more than likely isn't accurate either.