If the blogs, fanboys, and hype mongers are to be believed, it looks like in about a week we are going to see some major announcements from Sony.  Quite obviously, they are potentially the announcement of the Slim, a price cut, or even both.  While I think Microsoft's software library can still hold its own against Sony's, I have to wonder what they will do to counter on the hardware front.  I haven't seen any really detailed discussions on that point yet on the forums, and that's probably because MS has been so good at keeping their cards close to their chests.  I'd like to hear what you all have to say about it.  Here are my thoughts on the matter:

1)  An Elite model taking the place of the Pro model and relying on the extra features to sell the hardware is not going to work, just like it has not worked for Sony.  Most holiday shoppers (aka parents) will not have the knowledge about console specs to realize that the Elite is the new Pro at a cheaper price with more features.  In other words, they won't know enough about the history of the hardware to realize that they're getting a deal.  Just like how they don't know enough about the features of the PS3 to justify spending the money on one.  (Smarter marketing would have helped Sony out on that front.)

2)  I know PS3 fans are excited about all this, but I feel like they are underestimating MS a bit.  MS has been very good this gen about keeping secrets and then just dropping bombshells when they're least expected.  But I hope they realize that a PS3 hype snowball has built up just over the last couple of days; it may not be a bad idea for MS to "leak" a couple of things into the wild to get some buzz going.  For example, there have been a handful of rumors that MS is planning their own Slim model.  What would happen if they leaked it a week before Gamecom and then announced its availability shortly after?  That would stop the PS3 PR train in its tracks, at least for a little while. 

3)  I don't necessarily care if PS3 catches up or passes the 360.  At the moment it has a 30+ million user base, which is NOT going to discourage developers from making games for it.  But if there was a sudden drought of games and developers started turning more toward the PS3 due to a huge increase in sales, I would be disappointed.  It's not that I don't have the money for a PS3 if that were my only viable option left.  I could buy a PS3 tomorrow at its current price point if I really wanted one.  It's that I have really become attached to my 360.  I love Xbox Live, I love the games, I love the interface, and I love all the extra features.  I don't WANT to have to switch to a PS3 just to keep playing all the latest titles.  It was hard enough to ditch the PC for a console (complete 180 degree change in the way I've been gaming over the years), but I love that I chose the 360 when it was time to decide.  I just really love it. 

That's my take.  I really hope that MS has something big planned to counter, but right now, it doesn't seem like they do.  Project Natal coming out in 2010 isn't good enough.  I want to know what they're going to do NOW to combat Sony in the coming months.

I actually agreee that ppl might be expecting a too much from slim and to little for MS..but we'll see

I agree with you on #1 and #2. Microsoft are not a bunch of idiots twiddling their thumbs having no plan to counter Sony. In fact, everything we've seen this generation would suggest the opposite is true and that they're waiting for Sony to make their move so they can counter. #3 will never, and I mean never happen. The tie ratio on the 360 is way too high and it is a software beast, thus there is just way too much money to be made for them to possibly ignore it unless Sony wants to fork some money over, which they haven't done much of, if any lately.

I think Ms will do something, a lot of people underestmate ms. Let's Sony will come up with something good but people want a price drop more than a slim. Nintendo will eventually make HDD's or more color for Wii's in the US.

well,

they have Forza3

correclty used (marketed), they could take europe in 1 seconde (if GT5 is not around of course).

1)the most likely thing they would do
they would price cut after sony, so it's win , for consumers.
2) i doubt they will make a slim, they don't have the tech or the engineering muscle power sony, and most japanese companies have to do such thing, look what happen to RROD ,E74 fiasco, scratching disc drives, while i think microsoft may try to do it this time, not as in now, would release way later the ps3 slim unless they do another 2006 360 and pass all the security, quality testing.
3) u won't have to buy a ps3, unless he wants to play first party sony games, which are many now and stil growing, the only think that will change it's likely JRPG support will shift to the ps3 and wii due larger userbase in japan especially after FF13.
third party will remain multiplatform especially the western ones.

They have Splosion Man. Who needs a PS3 Slim? It can't splode :D

Everyone will be playing Muscle March for Wii so no one will be caring about announcements.

nothing