Well thank god someone else knew too. With the logic going around here it'd make sense to make Black Friday deals all year long too because people would buy more of that product too! Nothing should ever go back up in price after a holiday sale! Only marketshare matters, not profit! It is times like these where I'm glad the members of VGChartz have no power. They'd run MS to the ground with this mentality.

Fire sales and the very aggressive strategy was a must after the very critical situation of MS, massively losing in their own territory.  MS wasted hundreds millions dollars for this move, to get some hype and momentum in NA and UK. MS would seriously hurt themselves if they continue like this and keep the price at $350 when they need $400 to produce the machine.

 Nobody, even a very rich Company, come into a business to waste money just to sell 70-75% of what your competitor is selling in the Global. It's better to make a lot more profit in low season selling 40%/45%/50% of what your competitor is selling in the Global, and have more fuel for competitive deals in High Season, with a new SKU which is also cheaper to be produced.

Microsoft should do that and do $400 + 1 free game of the customer's choice.

So much speculation and assuming in this thread. Firstly, the only people that know truly how much it costs to make an X1 are the top level executives of whatever branch holds their gaming division. So to say that they're losing this massive chunk of money with no real idea as to how much they're actually losing is ridiculous.

Second - Someones eating crow. Going hand in hand with the first point, I bet you it doesn't and probably never did cost $400 to make a kinectless X1. The teardowns we've seen are from journalists and tech geeks that don't have multi million dollar manufacturing contracts to drive down bulk prices - Look at the architechture of these consoles people. They're semi custom PCs and were meant to be profitable from a VERY early point if not from launch. With that being said I think that even at $350 a standalone SKU still doesn't net them a loss, it's the additional games that do. So I think that when the price goes back up in January, you'll be seeing games bundled in that $400 price point while a $350 SKU with no accessories or software will be introduced. Microsoft knows their situation and it wouldn't make sense to go through major losses next holiday trying to catch back up.

Third - I think that this 'reminder' about the impending price hike is a ploy to get a final spurt of sales by deceiving the consumer. Even if the price does go back up it probably won't last long.

I think people are thinking WAY too hard on this which kinda makes me sad. 

Typical sales pitch. Buy now, limited time sale! Then after the sale ends, they will start another sale.

Agree with much of what you are saying, but you are guessing on produktion costs aswell. And the retailer probably demand margins around 3-5 % ( expect them to be low but not zero %) and that add maybe 10 to 20 $ aswell. Microsoft sure can take the hit and probably lower the price soon and microsofts xbox one longtearm plan for now I know nothing about.

They will probably see how it goes at $400, hoping that the increased momentum they gained during the holidays will stick around even with the higher price and if they aren't happy with how the X1 is selling in Jan-Mar then they'll probably lower the price again.

Or they'll stick with $400 until October and then go down to $300 with 4 games included or something since they've basically already said that they only care about the holiday season, who knows.

If you hit the link it says the save $50 on the Unity Bundle and the Unity + Kinect Bundle will be ending on January 3rd. So you will have to pay $400 and $500 for those. I wonder if they keep the system with no pack in games for $349 still? Don't know if I am reading to much into this though..

The point of the price cut was to close the gap in the US, mission accomplished. Time for 'em to make more profits.