I'd be very surprised if any of these companies would reduce prices of games to give the incresed profits back to the customer.
It is anathema to any company whose prime reason for existence is to maximize profits so i don't expect any significant (rather none at all) price decreases
You're probably right about this. If this turns out to be the case, this lifelong console gamer is putting his money where his mouth is (something most people can't seem to do and will proceed to bitch about it instead) and not supporting this B.S. in any way.
What i said relates to all companies.. they won't give up profits if they don't have to. At best they'll do it for marketing purposes (and then make a big public deal about it so everyone notices) or simple market competition forces them to lower some profit to remain competitive.
With console gaming the market is pretty limited.. it's either Sony or MS and i guess neither of them will deviate much. Currently MS is in the spotlight due to the most recent unveal and a bit more information that got negative reaction. So far Sony has been pretty reserved in their information and i'd bet everything i have that Sony is paying very close attention to what MS does and how the public reacts.
However time is running out.. E3 is around the corner and production/design has to be nearly finished right now to allow enough production time and internation shipping so i guess Sony's hand will be forced soon. E3 will be very informative i believe, especially on the issue of used games.