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NYANKS said:
Am I wrong, or is Microsoft making a mistake by not making a price cut sooner than later. It seems that the longer MS goes without undercutting PS3, the better the better Sony's standing will be when the time to cut prices comes. Would it be possible for Sony to strike first? That'd be cool, lol.

You have to lower manufacturing costs first. When you lower the price, you tend to sell more. If you lower it to the point where you sell 10's of millions, and can never get the price down, you are in trouble. It's not like you can raise the price after the fact. There is where a Software company competing against a hardware company loses.