I think they'll drop the Arcade to $149 for the holidays which would look good against the PS3 in flyers at half the price, obviously not paying attention to the specs of each system of course. They seem to have done some trial runs at that price in Canada in the past few months so I wouldn't be suprised to see it happen again for a holiday push.

Good point, but I see that as a second element:

1 - Can MS cut the price further if they wish pretty much anytime?  Answer - probably

2 - Would another price cut have decent impact on demand?  Answer - not sure.

I agree initial response to price cut seems muted, but that could be down to focus on Slim, lack of new titles (ODST clearly appealing to existing owners), time of year, etc.  We'll have to wait a bit to be sure, plus I want to see how 360 fares over December at its price point.  But I agree while MS could cut price it wouldn't necessarily make sense right now to cut price, they could just devalue the brand without gaining that much market share if they drop too fast too soon.

The "price cut" they had was basically a shuffling of SKUs.  The Pro basically just got a larger hard drive and the Elite was eliminated. 

In microsoft's eyes yes, but im sure that 99% of consumers dont think on a level.  They saw a price drop of 399 to 299, its best to keep it simple

In B4 someone starts listing Sony exclusiv. . . never mind.

MS wont do anything until after the holidays though I'm sure they expected a bigger hardware boost from OSDT.

They just should dump arcade and drop the price of elite to the same level as arcade is now (199$). One sku would be better for consumers (several sku's may confuse people) and 199$ HD console with HDD would be nice deal. I really don't think that arcade is that much more cheaper to produce than elite. (only difference is missing HDD?)

At this point in time - 4 years after launch - the PS2 and Xbox were down at $149, even though they started at $299.

Half the price for X360 would mean only $149 for the Arcade and $199 for the HDD SKU! That's what we normally would expect from price drops. But in this generation only Sony is cutting it's price in a traditional manner, while both MS and Nintendo are keeping price drops sparse.

I hope MS can afford to drop the Arcade to $179 and the 120GB to $249 in North America soon (and to €149 and €199 in Europe) to gain back at least some momentum.

MS price drops are sparse compared to sony? They had a drop in q4 08 and another in q4 09. Sony had one in q4 07 and another in q4 09 that seems more sparse to me.

I disagree.  All the consumer saw was instead of a $199, $299, and $399 set of systems, they now see a $199 and $299.  So just a removal of the $399.