and now that the 360 is priced so far below the top of the line PS3, it really generates a comparable differentiation between the two consoles.

The choice becomes, Buy a cheaper 360? or buy the higher priced (and therefor higher quality) PS3.

In some regards, Microsoft has completely priced themselves out of the hardcore market, (at a comparative level anyways) Shining a new light on the PS3.

and now sony can make a price drop while still being more expensive than microsoft

a lot of nonsense things take sense when a price drop takes no effect xD

 I hope MS follows suit and keeps the pressure on the PS3. Do not expect a Nintendo Wii price cut for this year.

Uh...

Im getting this feeling of excitement. The console wars are reaching an intense cliamx.

Goosebumps total.

This is looking good for PS3, but it could have a big impact around Christmas time if Sony doesn't drop the price.

Yeah, but I work in retail demand forecasting and price optimization, and I can tell you that from a retail perspective, while it gave a welcome boost, it was nonetheless weak response based on percentage rise.  20% to 40% spikes (depending on region) from a retailer's perspective is not good given the size of the drop.  If the response was very strong it should hav been much higher.

What I'd like to see if the percentages by model - i.e. did the Arcade get more or less of the boost?  Which model is more price sensitive?

I do think the cut might show more influence when GTA IV comes out - that will be the real test I think.

It may be weird from me saying but "its about time"! I'm getting tired of the 360 chewing off PS's hot franchises just like that. So seeing the 360 dropping in sales comparing to the PS3 sure makes me giggle in my fists.