Not really. The main reason why the production of the old machines was slowed shpould be rather clear. Decrease the Xboxes that are lying around. Once the shrinked processor is there you want to switch as fast as possible to the new version. Every of the three versions benefits from it.

Because it doesn't need to...yet.

Good question. It could use a price cut. I don't believe one would have a huge impact, but it would definitely have some. When a company has to lower its forecasts by 1-3 million units without any apparent supply problems, something's wrong. Really the question is: how important is gaining market share? Apparently the answer to that question is: not important enough.

The reason Miscrosoft won't lower the price is because it's doing so well. Basically, they are maximizing profits. Why lower the price when people buy it for the amnount it is.

a 150 core system is actually an interesting thought. That would put Nintendo at a crunch. Price has been a big factor for people buying Nintendo. But if they compared Xbox360 and Nintendo side by side, and Xbox looked better AND was cheaper, then Nintendo would be in trouble.

Price may be a factor, but I don't think a $150 360 will change grandma's mind on which system to get. Also keep in mind that the Wii comes with a game for $250. A $150 Core gets you a crippled 360 which still needs a game and a HDD to get any good use out of it. Back to the original question, MS hasn't dropped the price because it doesn't have to. And considering that Halo 3 will sell a lot of systems, I'm beginning to think that there may not be an official price cut this year at all. If there's no price cut, we'll probably see a lot more 'deals' where you get a free game, controller, and/or membership to Live with the purchase of a system.

Basically they don't need to. MS and Sony don't still see the Wii as a competitor. So, as for MS they are happy with its selling performance in US and EU. (Japan price is cut to a loss already). The US and EU price will remain high until one of two things happen: A. PS3 sales rival 360 in one of these two markets for two consecutive months. B. The smaller chip comes out and *after* the price reduction they will still be profitable on each model sold. I still think that in June/July one of these two things will happen. My personal bet is on B, as I don't see PS3 selling better than anyone in US or EU until their price drops by at least $150.

They aren't dropping the price because they are aiming to be profitable for the first time in the Xbox division's history by the end of the year. Fact 1 = a price drop will make no difference in Japan Fact 2 = they are $200 cheaper than their main competitors without a price drop and selling better then them in the biggest market Fact 3 = there is pressure from higher-ups to get profitable; lowering the price would move them away from this goal But this hardly rules out a price drop later this year, especially if 360 sales slow in the U.S. and Europe compared to PS3.

Uh... I'm pretty sure PS2 and Wii are competitive systems too... And they're both outselling 360 on a regular basis in all three major markets... That alone is the case for a price cut. But everything else you said is spot on.

Not quite. The PS-2 will slow down by itself and the Wii addresses to a part different players than the Xbox 360. It's main competitors are PCs and the PS-3. PCs are a non Issue and compared to the PS-3, they are now earning money while the Sony looses money with every PS-3 sold. But a possible lead of the PS-3 canges everything. We can see this in Germany right now. After Media Markt and Saturn even Amazon.de lowered their price.