Microsoft wins this Christmas compared to Sony. No doubt about it. But at what cost? X360 is already $150, how low can they go? Lowering their high-end models won't have a massive impact compared to the price-cuts this year. We are just 3 years in this generation and probably 3 years to go.
It's better to be a winner in the last 3 years (more sales), than the first 3 years (high costs). Still Microsoft has improved much compared to last generation. Their mission is already accomplished.