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Microsoft can afford to cut the X1's price but it isn't going to ever cut it by that much at once. Even if this generation is shorter than the last there is still gonna be at least five years over which MS can lower the price when needed. It would also be an admission of absolute defeat and I actually think a lot of people would question it's long term future if it had massive price drops over it's first five months.

X1 is doing fine and will receive a nice boost this month with Titanfall and bundles. There is no need for such drastic action at this point.