Yeah I think we'll have virtual price cuts this year. MS will bundle Natal with all 360's but the price won't change. Sony will (or rather needs to) bundle a PS Eye and at least one wand with every new PS3 sold, and not change the price. MS may also re-introduce some of the peripherals they took out of the Elite at the time they eliminated the Pro.
More hardware for the same money = "price cut".
MS may have the profit margin to bundle Natal and drop the price slightly ($25). But doing so might put the 360 back into negative territory, or sit at break even. Ditching some hardware content in the Natal in favour of using 360 processing capacity will make Natal cheaper than the original concept, without substantiallly affecting performance.
Sony doesn't need to drop the price in Japan in response to the 360 strategy, their Japan strategy is around competing with Wii.
If Sony wants to continue pulling ahead of 360 in Others markets and stay in touch with 360 in USA it will need some sort of pricing response if 360 does drop in price. These days in the big markets at least PS3 really needs to be the same price, or only slightly above 360 Elite, but not so much above the Elite that it makes people take a second look at the 360 because of the price difference. If the Elite drops to 250 Euros/dollars the PS3 reallly should drop to 275 Euros/dollars at least. There's no point in the PS3 responding to movements in Arcade pricing. If Sony split theuir focus between about sales relative to 360 and are achieving and maintaining per unit profits then they should ignore 360 pricing.
If Sony are really focussed on per-unit profits and not at all worried about 360 sales then they won't bundle PS Eye or wand and leave it solely as a bundled perihperal with Wand games (like PSEye was bundled with Eyepet and will probably have GT5 bundles too), and sold as a separate peripheral.
I'm 50/50 whether 360 will get an absolute price cut, I'm more certain that PS3 won't.
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