ROFL.
The truth is that some people here give themselves a bit to much credit than their worth.
MS goal is to make money, not to win some silly console war. Reducing price at maximum rate doesnt make you money, nor does it necessary mean massively increased sales levels either. Id say, considering how well the X360 has been doing, id have to say that MS have been absolutely brilliant, they have sustained the same level (and even seen significant growth) of sales after the PS3 launched, without any pricecuts (or did they have one 50$ cut? Anyways, the competition have dropped $200 so still brilliant).
MS officials certainly know more than what we know here on this forum, because going by 99,99% of all predictions here, the X360 would tank and be dead by 2008... Nobody certainly predicted this, aspecially considering how agressive sony was with price cutting.
If somebody here would tell you at the X360 launch, that the X360 would keep up with the PS3 in sales after 2 years without pricecuts (while the PS3 dropped 30%), with lots and lots of negative PR about the 33% failure rate with RRoD. You would get laughed from this forum.
Perhaps the average joe sees more value in an Xbox 360 than most people here does? Certainly more than i do, if i was to buy a console today i would buy a PS3 in an instant.
What amazes me is that it's fanboyism, even for people who already own the console or own multiple problems.
Very few people seem to be able to put themselves into the shoes of MS stockholders and see how simply amazing it is that MS has been able to keep the price of the 360 elevated for as long as it has been.
Sure, it needs to drop, and needs to drop rather significantly at some point, but that 'need' is counter balanced by MS ability to sell consoles at their current profit margin AND discourage competing sales.
It all gets back to what was discussed upon the initial launch of the PS3. That the PS3 was priced so high that MS bought themselves essentially 1.5-2 years worth of 'wiggle room'.
I think two things are in play here, and these are mere speculations.
But the first is that MS had initially planned to have a $199 core/arcade version on the market prior to today.
The second is that MS didn't foresee the huge loss due to hardware failures.
However, the price point of the PS3 has allowed MS to maintain the higher price of the 360 for longer than they originally planned in order to recover their losses due to their pathetic QC.
If the PS3 would have come to market at a price anywhere close to that of the 360, or if the PS3 were able to meet previous price reduction strategies, the 360 would probably be dead by this point because of their hardware failures.
In essence, the PS3's extremely higher price point allowed MS to overcome their hardware failures and maintain their own higher price point for longer than they originally planned.
The $199 core/arcade is coming to the US. The only question is whether it comes now before GTAIV and Holiday 2008 sees the $149 core/arcade, or if they do something less than $199 for GTAIV and move the price point to $199 for the holiday.
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