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If MS made a dent into PS3 sales then they would obviously cut the price. But it seems that MS would be lucky enough if they won the holiday season in NA, which I don't think will happen. So when will we get a $299 PS3? Sometime in 2009. Sony will be able to sell it with a profit or at least small loss. The effect would be bigger (the PS3 would probably get a 100% increase y.o.y, just like with 40 GB). And last but not least they would be able to meet demand (it seems like they can't with the 80 GB in others).