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Why on earth would they do that? Just to be "competitive"? (not sure what this implies by the way).

Microsoft's goal (as well as Sony) is to make money. What you are saying is that to be "competitive" they would need to lose money and piss off the investors? I do not get the logic.

They do not need to sell as well as the PS4 to be successful. Now if by competitive you mean that, I guess a 150$ price cut would help but at what cost and just for bragging rights?.