Well the 360 is 5 years old and just went thought a massive redesign. For a company that would be out for market shares I think the price I gave are reasonable. Point is Ms has other activities in the ED division that need major investments/losses.I'm guessing $399 because Sony went for $399 for their Move bundle. I'm not entirely convinced the 360 will have a price cut this year. If there's a price cut, then drop my guess to $350 or so. I really don't think MS is going to loss-lead on this: I think the days of loss-leading on hardware are over, for everyone.
When I read that I also wonder if there will be at some point another console generation. OK they can launch something else before "EOLing" the 360 but as time passes does it makes sense?
I've less and less certainties on the matter. It becomes every years tougher to compete on price and perfs with PC parts, coming with something acceptable will require an almost impossibly huge R&D effort. Will Intel or AMD have real intensive to sell their products at low price to console manufacturers...
I really wonder if Ms sees the 360 as a place holder to prevent Sony to regain too much traction on the core gaming segment. If they can make money in the mean time they are happy. It makes sense but for a company with Ms deep pocket and usually long term strategy it doesn't make much sense, why let a opponent recover if you think you'll have to fight again and while you have the chance to hurt beyond recovery? So they may be considering another long term strategy.
Anyway I should have remove the doom and gloom stuff after I wrote my post as whether it should make sense or not 399$/€ may happen for an elite/kinect and your prediction could prove accurate.
EDIT
It's also why I think Sony should have stayed with proprietary tech, they entered a fight they could not win if not against MS but also ATI Nvidia Intel, etc.
"Winning" with proprietary tech (which was easy imho) could have push further the PC/console convergence.
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