This is nothing more than a PR stunt, and a bad one at that. The price cut has almost no effect on the PS3 Japan launch and obviously doesn't impact other regions. Here's why. Sony has announced that it will have approximately 100,000 consoles ready at launch in Japan. Sony also announced that of the launch consoles, about 80% would be the high-end model leaving 20% to be the base model. Therefore, only 20,000 consoles will be seeing the price cut. In the scheme of tens of millions of consoles, that is less significant than the presence of the Xbox 360 in Japan.
That dig at the lack of support for the Xbox 360 in Japan leads me to another point. Although Sony didn't overtly state it, as mentioned above, this move is partly in response to the Xbox 360 HD-DVD add-on. Sony, who is using Blu-Ray in the PS3, is in a betamax vs. VHS battle with the rest of the world right now between Blu-Ray and HD-DVD. I see any response to Microsoft in Japan as a sign of weakness. At last count, only 17 Xbox 360s have been sold in Japan (ok, so it's more than that, but seriously, not that many more) and to intimate that a price cut in the PS3 is to compete with the Xbox 360 only legitimizes the Xbox 360 as a real choice for Japanese gamers.
Getting back to this announcement backfiring on them...the ire of the gaming world is at such a high level for the PS3. Cutting the price on a few consoles in Japan doesn't affect anything here in the States, and only rubs salt (and lemon) into the wounds of the Europeans who have to wait until 2007 to get their PS3s. In fact, knowing that the console is cheaper in Japan will only make the angry US gaming public even angrier.
I'm adding today's announcement to the long list of bad moves by Sony.
Thanks to Trancemaster for linking to the BBC Story.