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Train wreck said:
The past five weeks have shown that a new X360 price point does not generate a substantiation increased sales. The ability to lower prices at will is a nice card to have, but the card has been overplayed.

The main reason why Xbox 360s have been sold in the past is that it was significantly cheaper than the PS3. However now that the PS3 and Xbox 360 Elite is priced the same, the PS3 looks like a better deal due to the many options (blue-ray and wi-fi) on it. 

It is also important to note that Sony was already pushing themselves to the edge by releasing the cheaper slim, especially since Sony's gaming division have been in the red for a while. Microsoft on the other hand have profited in the last two years(though not too significantly) and have more options at their disposal.