My guess is that MS is waiting for Nintendo to make a price cut. They don't want their flagship SKU to be the same price (or less!) than the Wii. It's just bad optics for a console that claims to contain more value. If the Wii drops (e.g.) to $199, I expect MS will drop both of their SKUs by another $30-50 immediately.
If I recall back to 2007, I think the new Arcade hadn't even been revealed yet at this point in September. So it is possible that MS is still waiting for the right timing to make another move, such as what I suggested above.
I dont see why people keep thinking MS cares about the price perception versus Wii, they dont. Wii isn't even directly their competitor, PS3 is.
The best example of this is the numerous people in early 2008 who claimed MS couldn't drop the Arcade below the Wii, because then somehow people would..whatever dire effect they assign to pricing lower than the Wii. Then MS summarily cut the Arcade to 199, and everybody survived just fine.
Anyways, I dont expect MS to cut. The Elite cut is what they're going with I suspect. Probably trying to pull a Sony circa the last 12 months, and focus on hardware profitability at the expense of some sales. Except I'd suspect they'll fare better than Sony did with it, in that I think they can sell parity with PS3 after the slim hubbub dies down.
I would expect something like a $20 cut from MS,
if their sales appear to be in free fall versus PS3 over the next couple months. Again, theyre not worried about the Wii.
The thing that throws a lot of wrenches into MS's whole strategy is Natal..I kind of suspect it's disrupting the normal flow of 360 price cuts. What I think may be happening is MS is planning to pack Natal in in fall 010, but they dont want to hike prices to do it. So, theyre keeping prices at a somewhat high level. By fall 010, still at 299/199 360 base hardware should be quite profitable, so they can pack Natal in without having to
raise the price. But in the meanwhile, they're forgoing the normal cuts they might be making right now.
I also think 199 is a very attractive price for Arcade. What they need to do is get games that look great like Forza 3, ODST, and (hopefully) Reach out there, and it will sell. It's more about software right now, and I'm a guy who rarely assigns much importance to software