They really don't have to do anything at this point. I'm sure Microsoft knew Sony was eventually going to drop the PS3's price, so Microsoft decided to drop the 360's price much earlier. Sony will probably beat them out in the short while and maybe even through the holiday season, but Microsoft already has a good price point with the 360 and has managed to get an 8 million console lead its rival. For people purely looking for a gaming system and not a Blu-Ray player, the 360 still has the Arcade model at $199 and the $299 Elite Model may look better to some because of strong IPs like Halo and Gears of War. If Sony really starts to inch closer to 360 in sales, Microsoft can respond then. Microsoft knows it won't beat Nintendo and pretty much knows it has beaten Sony this gen, so they can probably just look at how the market changes in the next few months and respond accordingly. Unless the PS3 Slim and the price-cut does miracles for Sony, they probably don't need to lower the 360's price to stay in second place until it's cost-effective for them.
