You could just as easily paint MS as a kid that quits a game as soon as it looks like its going to lose and starts a new one to disguise the fact...

OT I think the price drop will help 360 keep dominance (for HD consoles) in US over PS3.  The real question I think is can a lower price Arcade make a difference vs the Wii?  If not then I think MS will have wasted a lot of margin vs PS3 when its already in a good place vs Sony this gen and missed its chance to make any kind of dent in Wii sales.

The Wii has such a strong brand I don't see many buying Arcade vs Wii just for price.  The Wii games/image I believe is seperate and looking at Others I'd note that the low price Arcade made zero impact on Wii sales so I have to imagine that in US it will also likely fail to make much difference.

 Key word is plan.  No plan for a price drop.  Which means that they would not initiate a price war with Microsoft.  However, having one initiated, I believe they will respond with their own $50 drop.  I think they'll wait to November to see how well the Microsoft cut works and then drop the price right before the holidays to come through as more of the bargain for Christmas.  Also, http://news.softpedia.com/news/PlayStation-3-Drives-the-Sony-Games-Division-to-Profit-91041.shtml Sony Games division was profitable for the quarter ending June 30th.  If Microsoft can afford this cut on their small profits for this year, I don't see why Sony can't. 

You'll also be hard pressed to ever find a management team that will hint at a price drop before it occurs.  They'll either say this that they have no PLANS for a price drop or they believe they have effected priced their product to the market.  Because when they hint their is a pending price drop current sales become stagnated and then a price drop becomes a necessity.

Yes, but the US economy is much worse than it was ever in the last generation of games.  I think you'll still see people not purchase the 360 at $199.  Additionally, we've never had a unit as gimped as the core unit on the market.  Yes, I know you can add a hard drive and come out better than the pro/elite, but the casual market they are aiming for with the core is likely to be turned off by needing to pay for more items and adding the harddrive.  Most likely people that were waiting for the pro/elite to drop will buy this and add a harddrive. 

 ==> that is what I m stating since months : Wii is the TRUE Xbox360 killer

it is taking away the whole casual market from the Xbox360 while Xbox360 is not really able to block the PS3 sale on hardcore (400$ is hardcore)

1- I could post more quotes, but the main point is that Sony has promised investors to not cut the price until PS3 hardware isn't sold at a loss anymore. They even went as far as saying that the PS3 has established a minimum userbase which allows it to be relevant as a platform. If they cut their prices, investors won't be pleased, particularly given Sony's poor profit forecast for the year and declining sales of the PS2 cash cow.

2- Don't compare Microsoft and Sony... Microsoft as a whole makes huge profits, and they didn't promise to focus on profitability like Sony did. Sony is in a much tighter situation with no room for wasting money.

I'd bet anyone money that Sony won't cut their prices this year. As I said, not certain, but price cuts are very unlikely all things considered.

I can post quotes all day.  Microsoft gaurantees games division will be in the black in 08 http://www.gamesindustry.biz/articles/bach-xbox-will-make-a-profit-in-2008.  Xbox exec fired for disaster that is 360 http://www.betanews.com/article/Xbox_Chief_Peter_Moore_Leaves_Microsoft/1184704296

Like it or not part of management's job is to spin things to theire advantage.  Last I checked neither Sony or Microsoft were not for profit companies.  At the end of the day their jobs depend on the profitability of the companies they run.  I still say Sony are idiots if they let something like this come out in advance.  Who will buy an xbox for the next month before the price drop?  The most effective drop is one that the market doesn't see coming. 

Yes, Sony http://en.wikipedia.org/wiki/List_of_companies_by_revenue the 91st company in total revenue is no Microsoft, number 117 in total revenue.  I'll make sure not to compare them again.

If the 80/50/50 price drop is correct, Sony will match this year.

@cleveland124:

1- I know Sony's overall profits fell, isn't that a reason for them to be cautious? They even revised their profit forecast down by $500 million, even though it was already substantially lower than previous year's profit. Have you really looked at their latest fiancial report? I can't stress this enough: things are very tight at Sony's HQ this year. Their stock price is near a 5-year low, profits are down, their cash cows are getting thinner.

2- Sony's game division is not small, in fact they contributed a large portion of Sony's overall profit during the PS2/PS1 era (a few billion dollars).

3- Those things you posted about Microsoft weren't promises to investors, as far as I know.

4- Revenue is not profit. Microsoft makes billions every quarter, Sony doesn't.

5- Want to do a bet?

EDIT - fixed/added some things above.

1 - http://www.nytimes.com/2008/07/18/technology/18soft.html?partner=rssnyt&emc=rss Microsoft profits are tanking too.  Shouldn't they be more cautious?  Or is it the whole sell hardware at a loss, make it up on software thing working?  Maybe it could work for the PS3 too.  I wish they hadn't spent so much on PS3 hardware.  But they did, so now they have to move forward for the best plan for their product.

2 - Their game division is profitable and will likely still turn a profit in 2008.  If you think think sitting back and letting Microsoft dominate the market is going to help their profits, I think you need to think again.

3 - Okay, show me the article where they promise that they will not cut costs.  All I see is they are saying they don't want to cut costs and will focus on the profitability of the company.  Not that it makes any difference.  Yes, investors have been lied to by management before.  It's called responding to the market.

4 - I don't do internet bets.  But since you do, do I need to conceed the point since you are willing to put up money?

1- Microsoft has barely cut the price of the 360 since they launched it. Compare that with Sony's huge price drops. And let's face it, neither Microsoft nor Sony are being successful at the lose on hardware/make it up on software thing. My contention is that this is more of a problem for Sony than for Microsoft, due to the situation in the whole company.

2- Yes, they will likely turn a profit, and do you know why? Because they're focusing their strategy on not losing money this year. That means no moneyhats to third parties, and very likely no price cuts, as per their stated strategy to investors.

3- I didn't get that. "promise that they will not cut costs"? Their statement about profitability was regarding PS3 hardware specifically, not the whole company. The company as a whole will always be focused on profitability, obviously.

By the way, take a look at my edited post. You have ignored the very important difference between revenue and profit. Sony has huge revenues because they sell very expensive products, but their profit margins are very low, so they end up generating much lower profits, thus having to be more careful about spending money. That's the fundamental difference between Sony and Microsoft nowadays.

 I wonder if that will be the case this xmas with money getting tight all round.

U S and other economys are not in the doing so well at the moment.

but the arcade donsnt have a hdd it only has 512mb i dont know if that is a good amount for 360 since i dont have 1

i heard you cant save