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This is very much an act of intimidation. They want Sony to double guess themselves and be fooled into thinking that 'if we drop the price, it won't serve us any purpose as MS will follow suit, which means we won't gain market share and we'll never take a profit.' Which is exactly what the guys at Sony will be worried about after reading this.

If they're scared out of a price drop then Microsoft will have the dominant marketshare but at least Sony can make some money off console sales, and if they do end up dropping the price MS is prepared to take losses again if needs be to crush their chances of gaining momentum. This is very cunning.