As to the extent of the cut, remember that even though the XBox launched with a similar deficit, MS was willing to drop the price $100 just 7 months after its US launch in order to match the PS2. It's now been over 24 months since the 360 launched, and likely another 2-4 months will pass before a price cut is announced. At this point, the XBox was down to just $180. If it were me, and I were trying to do an agressive push to keep Sony back on it's heels, I'd strongly consider a new pricing scheme of Arcade for $199, Premium for $249-275, and Elite for $350 (though personally I'd consider scrapping the Arcade price point all together). That would put the 360 in the Wii's price range, and well under the PS3s. While this would not force the Wii to cut price (which they could do painlessly), it could force Sony's hand and severely hurt their bottom line. |
Price cuts will hurt both companies bottom lines, not only Sony's. You think MS has unlimited money to throw at their Xbox division? They have a lot of money ($23B in cash) but they have to manage it in such a way it produces more money and not piss it away. They are down $7B already in their Xbox business, I think they want to be on the black for a change.
PS: Sony also has $11B in cash so none of them will run out of money any time soon.
