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Price cuts will always help. The Xbox One isn't an undersirable product in the US, its just LESS desirable than a PS4.
Undercutting the PS4 is Microsofts best chance to sway gamers back to Xbox.

If you told me the Xbox One could be bought for $350 with 2 free games last year I would have laughed in your face. It's amazing how much has changed since then. Microsoft has done a good job at trying to keep up with the PS4.