I don't think a price cut would make sense for MS unless they are truly worried about Sony/PS3 getting too close in US (which I don't think they will be just yet with a lead of many millions).
The main reason is that I don't think a price drop would make much difference vs the Wii. The Wii has the Zeitgeist right now and is the family console no questions asked. Just lowering price of the 360 doesn't change its market perception - so while it would drive additional sales I don't think it would drive enough to be worth it.
Wii is unstoppable right now competatively I believe and making what could seem a desperate move probably wouldn't be a smart move.
Also, PS3 has enough base/sales now that I think MS's ability to harm the console is diminishing. Also, if people want MGS or FF or any other exclusives then they want them whether 360 is cheaper or not.
Again, MS would be better spending money on its own exclusives and let them attract customers IMO.
In a few months 360 will be in 2nd place in US no matter what - why lose more money failing to change that?
In a few months PS3 will still be well behind 360 but slowly closing - why lose more money just to push it a few months further back?
If I was MS I'd worry how to get out of the hardcore box they've built for themselves for the next gen to prevent either Nintendo or Sony smashing them again by getting the larger, broader general gaming public vote over hardcore online gamers.
That's the real challenge for MS (assuming they want to be No 1 console). But you know, if I was MS I'd be wondering whether that's really the crown to chase, or whether they want to own the very profitable hardcore gamers who will pay to have Live and focus on action/Mp titles?
Try to be reasonable... its easier than you think...
