I think it is as simple as the OP says. M$ knew they were completely off on the price since Sony announced the PS4 at $399. They waited to see if they would get a free pass from the public. THe public bit off on it during the holidays.
Come February(based on the announced sales in that month) they knew the party was over. They waited until Titanfall to move $50-$60 with a pack in game. And they finished it off a few weeks later with a real price cut.
The only surprise is that they didn't drop the price to $450 60 days BEFORE the system launch. It was clear back then based on internet chatter that the XB1's perception was that it was $100 more and less powerful. THey hoped that the games would come out and look good enough that people wouldn't care. Then all of the multiplats came out and the fanboys went crazy over every little detail and turned what is mostly minor to the majority of gamers into a BIG deal. With the system power being criticized, its hard to stand by the extra $100 regardless of what the system can do or has in the box.
M$ had no choice if they wanted to keep up in both the US and UK.
It is near the end of the end....
