Opinions: Will Microsoft make a retaliatory price reduction.

[rocketpig]

The $1.1 billion estimate won't weigh into whether they cut the price or not. They wrote it off as a 2007 expense and by all reports, are planning to get into the black in 2008 fiscal year (yeah, we've heard that before).

As it stands now, I don't see how they could afford to NOT cut the price on the system at least before GTA hits shelves. The 360 is nearing two years old now; what console has ever sat for two years without a price reduction?

With the transition to 65nm in the rumored Falcon console, the decrease in RRoD, and the decrease in general parts costs, there's no way in hell that MS isn't making money on the 360 right now. They were rumored to be losing around $150 per console over 18 months ago. They have to be turning a profit on the system by now.

Their CPU, GPU, and RAM costs alone are probably 50-60% of what they were at launch and with the transition to 65nm, the CPU and GPU costs will drop like a rock.