I don't see MS cutting the price this year no matter what Sony does. They just released the Elite at $480, so how could they cut the price without making people angry? They could just cut the price of the premium to $300, but then why would people buy the Elite? Sony on the other hand is in a potentially critical situation where they need sales to pickup. Component prices are coming down for them pretty quickly, so they might be able to cut the price by Christmas.
As for the Wii, no way they cut the price of that. What's the point if they're already selling every single one.
My Top 5:
Shadow of the Colossus, Metal Gear Solid 3, Shenmue, Skies of Arcadia, Chrono Trigger
My 2 nex-gen systems: PS3 
and Wii 
Prediction Aug '08: We see the PSP2 released fall '09. Graphically, it's basically the same as the current system. UMD drive ditched and replaced by 4-8gb on board flash memory. Other upgrades: 2nd analog nub, touchscreen, blutooth, motion sensor. Design: Flip-style or slider. Size: Think Iphone. Cost: $199. Will be profitable on day 1.
