The 360 is due for a major main board revision in 2010. CPU and GPU on one chip is one major cost cutting method. A die shrink from 65nm to 45nm is also due. Both of these changes should prove to be a powerful cost saving punch for MS.
CPU and GPU on one chip gives the obvious cascading benefit of reducing or eliminating other parts. One cooling fan is needed instead of two. There may be enough space for the power block to go inside the case, reducing more parts.
So yes, a price cut is due in 2010. MS can afford to knock $50 off the 360 Elite any time they want, although doing this now may make MS take a loss on each console sold. But when the new hardware revision hit next year, MS should be in the position to drop $50 or higher without taking a loss. So at worse we should see $250 Elite next year. At best $200.
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