Interesting thread. I do have to disagree with your price cut point, though. I don't think that even a price cut would have allowed them to keep 2nd place. PS3's sales boost since 2009 has just been too incredible for MS to really do anything.
Last year's Black Friday is a good example. MS dropped the price of the 360 by $50 for every SKU except the $199 SKU (stores dropped this SKU to $149 for Black Friday, anyway), yet its sales were still down YOY for that week. The PS3, on the other hand, was up YOY, and it only received store price cuts (nothing official) to $199 (still $50 more than what stores were asking for the 360.) Heck, even with the incredibly popular Kinect, and the sales boost it brought, couldn't stop the PS3 from outselling the 360. In it's most popular years, 2010 and 2011, the PS3 outsold the 360 by ~640K and ~900K, respectively.
And for 2012, when Sony was thinking mostly of profit (they actually increased the entry price in the US by $20 when the new Slim launched), the PS3 outsold the 360 by ~1.6M units WW. Sorry, but you can't combat that with a $50 price cut. As MS actually illustrated by cutting most SKUs by $50 for ~3 months during the holiday season. In other words, once Sony corrected the ship, this was inevitable. Makes me optimistic about next gen, when it seems Sony's ship is on the right course from the beginning.
