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@ OP
I honestly think M$ has this last hoilday season to outsell sony or they know all 3rd parties will start to jump ship. I think that with low sales of Both high profile RPGs (TOV, IU) that 3rd parties are seeing that you can only sell CERTAIN types of games on 360. Sony seems to be in a better position to sell all types of games.

Of course im talking about the jap devs. Most western devs are on both systems anyway.

So to answer a price cut is always to get more sells or to sell more then someone esle so i choose DESPERATION.