You're speaking as if the cut would happen in today's environment, though. If MS did cut, it would most likely come in Sept. or Nov. of next year. A lot can change in that time. For instance, if Sony can get production cost for the PS3 down to around $250, I doubt they would mind breaking even on PS3 sales to keep above the 360. As of now they are only selling at a slight loss, 10% loss actually. Which I think means it cost about $330 to make the PS3. I can totally see them being able to get production costs down by $80 in a year. This would definitely offset any price cut MS would do, even if it was a $100 cut. Though I would guess MS would only drop it by $50, so they can still make a good amount of profit off of it.
And yes, the 360 has been selling at a profit now, but on whole, the gaming division is still in the red. It was only for fiscal year 2008 that they began seeing a profit, a profit of 426 million. Now compare to the period of 2001-2007, were they lost 7.2 billion. So yea, they have some making up to do. And that's not to rag on MS, either. Because the PS3 has cost Sony something like 4 billion. Though they do believe they'll be making a profit in 2010.
Basically, things can change. But, I personally can't see anything MS doing to destroy PS3 sales.
