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ChronotriggerJM said:
PS3 is in a much better place to drop price, not only does it benefit more from a larger install base....

 

Huh? How does Sony benefit more from a larger base than Microsoft?

Anyway...

I think they're both in about the same position. Sony has more experience with cost cutting, but MS has had a longer lead time with a lower-tech console.

I still expect that MS will have at least one model at $199 this year, and a second at $299 or less (the question is, will these be the Arcade and Premium, or something new?), and Sony will knock another $50-100 off their versions before year's end.

As for which one needs the cut more, I think it's MS right now. Sony weathered the XMas season well, and is currently set with a massive game lineup this year (provided key titles like FF13 and GT5 don't slip to '09) and has the potential to ride a Blu-Ray wave. MS has played almost all the cards in it's hands save 2 - a price cut, and the exclusive GTA4 content. GTA4 is likely to get a lot of PS2 owners to make the switch to a new console, and an attratively priced 360 could pull in a lot of them.