Yes -- to make this more clear for others: Microsoft is trying to hide several years of repair cost into their 2007 bottom line so they can claim "profitability" in 2008 even if they lose a ton of money with the xbox division due to repairs. In my opinion, the entertainment division is profitable when they've overcome all of the debt accumulated with the Xbox and 360.
Microsoft's sales have been slowly decreasing. They're pretty bad right now. Microsoft *needs* to match this Sony price cut. Microsoft may have just set aside $1.1 billion for repairs, but that's irrelevant to the 360's price. That's money they need to simply write off as a loss and they need to continue competing as if that never happened.
Neither cut will affect the Wii significantly simply because Nintendo has some big hitters coming out this year that millions want and are willing to pay $250 for. So even if Nintendo can manage to get some stock on shelves this year before the holidays, it *will* be hard to find Wiis during Christmas.
