But if they add enough to convince the buyers then it may be OK even though the price is high.
Wrong way of looking at it IMO. Sony banked that the hi-end users would buy their system, this is not happening.
This tells me that the traditional PS fanbase is what they now need to target(read: lowcost). Continuing to target the hi-end users will be a failed strategy.
All this talk of the system needin games is unimportant as well imo, it does not need games. So many people would buy PS3 on faith alone, if the price was simply lower.
We've seen with 360 that games rarely provide big boosts in sales, and rather they serve to maintain the current rate or boost it slightly. Even when they do provide boosts, it's never dramatic.
Despite having a huge library, 360 can't get over 50k/week in the US, why? $399 pricepoint. Meanwhile, the Wii at $250 is selling like mad with little software, and the PS3 at $599 is dead in the water.
This paints a very clear picture to me: It's not really games, it's not features, it's the price. Price is king.