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The window for an effective Microsoft price cut closed this January, thanks partly to the final triumph of BluRay, but mostly because of Sony's very aggressive cost-cutting on the PS3. The $399/399EUR model is a marvel of applied engineering -- they reduced the power consumption, consolidated the motherboard and heat sink, etc. Thanks to the strength of the euro, Sony is already breaking even on their PS3 hardware, and could absorb a $50 price cut without breaking a sweat.