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they said kinect cost was almost half of XBO total cost.
So, selling by 400$ a kinect free XBO must be a good deal for them, they would profit more per console sold.
They was also profiting more with kinect xbo than sony with ps4.

As they are profiting there is more room to drop the price. So i think it was the right decision.
if it dont sell well, they can cut the price even more.