$550 wouldn't actually be all that high compared to the PS3. The PS3 launched for $600 for the 60GB model, and $500 for the cut-down 20GB model (which lacked wi-fi and HDMI), and that was back in 2006. Adjusted for inflation, those would be around $770 and $640 in today's currency. Of course, that console didn't sell particularly well until later in its product cycle either, after the price had dropped substantially, giving the less expensive (and generally better performing) XBox 360 the chance to grab a large portion of the console market that generation.