No price drop? Does Microsoft think Sony is a joke?

[HappySqurriel]

I think there are a few things that are preventing Microsoft from dropping the price of the XBox 360 at the moment:

1. They expected the XBox 360 Elite to become a popular product and are (probably) disapointed with sales. It is possible that Microsoft produced this model with the expectation of 'reducing' the price of the XBox 360 while maintaining the price level ($250 Core, $400 Elite, and Priemium discontinued) and slow sales for the model make them question this strategy.
2. XBox 360 failure rate could be causing Microsoft to hesitate about reducing the price of the XBox 360 at the moment. There are (at least) 1.5 to 3 Million XBox 360 systems that were produced with the design flaw which causes a lot of systems to fail. Microsoft would (probably) want to destroy or quitely fix these systems prior to reducing the price of the system.
3. The price of the PS3 was just reduced and Microsoft may want to see what impact that had on long term sales prior to reducing the price themself. Next week the internet will explode as PS3 fanboys get all excited about the weekly sales numbers for the PS3 (probably in the 50,000 to 100,000 range and potentially passing the Wii's weekly numbers) but these numbers will not be meaningful; Microsoft probably wants to see whether the PS3 begins outselling the XBox 360 in North America before they implement a price cut.