Aaron Greenburg states that Microsoft believes Sony is going to lower the Price on their PS3 Spring of this year (2009).  Microsoft will be planning for this and will be 'Price Competitive' when Sony does lower the price on PS3.

However, SCEE disagrees stating "not to expect a price cut this Spring" and is sticking to the "Value Added" idea .

via. Kotaku

"The PlayStation 3 will get a price drop in 2009. It just has to if Sony wants the console to keep up, install base-wise. Microsoft's Aaron Greenberg agrees and expects a cheaper PS3 within months.

He tells Edge Online that Microsoft is planning on its console competition becoming more price competitive in 2009. Not really his call, obviously, but failing to plan means planning to fail, right?

"We absolutely expect the PS3 price drop to happen in the next couple of months," Greenberg said, following recent Microsoft sales boasting. "We're frankly surprised it's taken this long. I would expect they'd have to move on price, sooner than later, for sure."

Sony Computer Entertainment Europe president David Reeves disagrees. He says not to expect a price cut this Spring, sticking to the "value added" thing. With PlayStation 3s reportedly getting cheaper to make, we'd expect it sooner rather than later — "no plans" notwithstanding."

Basicly they just told Sony "Drop it, and we'll match"

Interesting stuff, Microsoft wants to intimidate Sony... Considering their finances it may just work.

@spuilliam, I would normally agree with you, with the current position of these 2 systems it would be good to pressure Sony like this, but I can't stop thinking that MS is completely forgetting about the Wii with this statement.

I sometimes wonder if Iwata sits in his office laughing at the press released from MS and Sony.

Price competitive? How much cheaper could a 360 actually get!?

My thoughts exactly.

The PS3/Xbox 360 are targeting similar markets so thats why they deal with each other so directly.

Microsoft knows that Sony needs to cut the price of their console at some point, essentially the best case scenario for them is the status quo and essentially this statement is an attempt to reinforce the current situation.

Whats interesting is whether or not Microsoft intends to move on price anyway early in the year. They don't have to cut the price of the Arcade unit. They make money on the Premium and Elite SKUs and cutting the cost of those by $50 is a way for them to directly target the market that the PS3 contests with these SKUs without incurring losses.

I find it funny that MS has to do anything to remain 'price competitive' when your competitor is priced so much higher than you are, and even with a price cut will still be higher. It's called fear...they know if the PS3 is at or near the same price, the 360 gets blown out of the water.

I also don't think that Sony is lying about not having a 'price cut'. It's not a price cut, because they won't be lowering the price of the current console. They'll release a slim version with a new price, and if the slim version never had a 400-500 dollar price, it's not a price cut to sell it at 300-400.

I don't think they're lying.

Fear?

might just be a good way to say (like squillie said) that they'll match.

even if they didn't match, it might make sony think twice before doing something (considering the possibility that MS drops again, making them lose the momentum of their own price drop). Any second that sony waits, is a second more for MS to sell xbox's to people that are price conscious.

The question now is whether Sony is actually intimidated or whether they are just going "meh... whatever".

This could be it actually, they might be trying to intimidate Sony.  Because everyone knows that Sony isn't in the best of conditions financially.

Match?  How?  Since we all expect a $100 price cut..MS cannot drop their price $100 again.  That's just fact.  They also can't 'match' the price, because they're already cheaper, and with a price cut will be the same price - and cheaper.  So what are they matching?  Yes, it's fear.  If you're priced so much below your competitors already, why do you have to plan for a price cut if they still need a price cut to bring their low-end model down to the same price as your high-end model?  

Yes, I say it's fear.