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Arkaign on 25 March 2014
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People are delusional if they don't easily read this as a desperation move. Not desperation in that they're about to cancel XB1 or anything that dramatic, but have any of you ever worked at high levels in corporations before?

I guarantee it went something like this :

Development "Look at all the good will we've achieved with the 360 generation, that gives us the ability to do pretty much any thing we want! The profits will be INFINITE!"

Reveal "Well, haters will be haters, but we will still easily be #1 .. right? We will kill Sony at E3"

E3 "Hmm, this isn't going so great, but this is just internet outrage, we'll outsell everyone easily"

Post-E3/Pre-Launch "Well crap, projections have us losing unless we adjust a little, but we will still easily win, and can put the DRM back later because used games mean we can only have 35m annual bonuses instead of 34m!"

Launch "Ah, see! We have infinite legions of dedicated Xbox brand fans that will never abandon us, and they will buy 1 billion Xboxes!'

Post New Years "Uh-oh. Sales are honestly pretty terrible. And after such a great launch! Okay, keep tracking, and get ready to make changes if things don't improve"

Late February "Well, it looks like not even Titanfall will help us keep up, so prepare the price drops!"

So there ya go. It's all a money question. At least Microsoft is prepared to sacrifice a little now to try to maintain some momentum.

Guaranteed : Microsoft will drop the price to $399 by November at the latest. Depending on how things are going, they may even bundle a brand-new game at that point, or multiple games.

Up in the air : How does Sony react to a $399 XB1? I said from the beginning that this new gen of consoles would be immensely more competitive than the past, and see faster price drops, but many IDIOTS completely discounted this obvious fact of the marketplace. There are billions of dollars in marketshare at stake, and combine that with the dramatically cheaper-to-manufacture and more standard architecture units this time around, and it spells quick price drops back and forth over time. Fall 2015 might even see :

$149 WiiU
$299 PS4 1TB Bundle
$299 XB1 1TB Bundle

And by 2016 $199 might even be doable. With post-28nm revisions of the processors, and SoC consolidations, it might not be a question of if, but when, that occurs.

This isn't like 2005-2006 PS360, jammed full of exotic hardware that took many years to get cheaper. These are by and large components that are pretty standard mass-produced PC hardware. In fact, the more PS4 consoles sold helps MS, and vice versa in terms of adding volume to the APU production, which will make justifying a 20nm, 18nm, or other die-shrink of them, maybe even 14nm and 10nm down the line.

XB1 could be pared down to something the size of a small bluray set-top player, and PS4 the same by the late middle to end of this gen. And no more giganto box + power brick for the XB1.