Well, let's get this clear -- I agree, it won't sell well.
The unsaid part of your argument is that they're spending $110 on top of the $300-$400 (or whatever) spent buying the PS3. It's the fact that it's a peripheral, and a late-gen one at that, that makes the price too much.
I suppose it is partly the price's issue, I mean if the whole thing came out to be $30-$40, then the story would be different. But going by the prices of the Wii stuff, that kind of price just doesn't seem realistic, and $110 sounds pretty fair.
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And let's be kind and say it does come with a game, is any game worth a $110 controller?
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To answer this directly, yes, definitely. A game can be worth $110 to buy into it. Some good examples are Guitar Hero/Rock Band kits and (though cheaper) Wii Fit. To a similar extent, all consoles are like paying a large sum up front for the ability to play the games that they make possible. Games definitely sell systems/peripherals.