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Hopefully for Microsoft, this price cut will result in at least these three things (in increasing order of importance):

1- A nice peak in sales (say 50-70%) for a few weeks
2- Improving the regular sales level to 20-40% more than it is at now.
3- Stealing more sales from PS3's GTAIV launch than it would have without the price cut.

The first two are quantifiable, the last one may be harder to see but is IMO the most important of them all for the console war.

 



My Mario Kart Wii friend code: 2707-1866-0957