Well they couldn't really sit back and do nothing with PS3 outselling it by a significant margin on a weekly basis and 360 not even having a dream of getting anywhere near Wii sales. At least at a reduced price they have a chance of remanining competitive.
Both Sony and Microsoft have had to drop prices out of desparation this gen. I think the way this gen has turned out can only be good for the consumers in the future gen. Both companies would have now learnt their lesson that consoles have to be sensibly priced and you can't foolishly assume that masses of people will buy your product at any price simply due to brand name. If things had turned out different we would have been looking forward to £550 Xbox 720 and £5 million PS4.
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