What could MS do to counter the PS3 price cut?

[Millennium]

MS doesn't have to do anything to counter the PS3 price cut. If Sony were to pull an insane move right now, they wouldn't survive long enough to overtake the 360 even in the face of increasing sales: the losses they'd take are simply too huge.

If the PS3 can somehow survive as a feasible competitor long enough that Sony can actually afford to cut the price, then things might be different. But to be brutally honest, I'm not sure that can happen now; Sony would have to make major gains at its current price, and no one -not even the PS3 fanboys, which is saying something- seems to assert that this is even possible.