I see your point here, but I think the key factor is how many people are in the console making industry. Your example of LCDs coming down in price is based on a very broad market. We see tons of LCD TV makers, and only 3 console makers. Peter Moore has stated how they went about pricing the 360, defining what the consumer would agree as a good price, and at the same time attempting to cover overhead. An LCD maker has to consider their competition. ILo, Wal-Mart's HD TV line, has a lot to say about how Sony will price their 32" TV.
I'm not saying each console maker doesn't consider the others, but I think they can approach pricing differently than other electronic devices.
Also, I have to say I am not impressed at all with the games on the 360; however, I expected that. Right now the system's periphials are the only thing "next-gen" on it. The games are not. Some hint towards it.
I honestly believe we won't see complete "next-gen" until mid 2007. Alan Wake, Assasin's Creed, Forza 2 and Blue Dragon to mention a few.
We are starving because the "next-gen" hype is everywhere. EA Sports uses the phrase like they have mastered it. Honestly, the only ones I see close to even touching it is Ubisoft, but that's opinion.
I think someone needs to clearly define what "next-gen" means.
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