Core 250
Prem 320
Elite 399

I think the next price drop will happen around the GTA4 launch.
Elite: $399.99
Premium: $299.99
Arcade: $249.99

I hope for their sake that it's more significant than the last one... :-p

By GTA4, I expect:

250 Arcade
325 Premium (I'd say 300, but I think MS would like some profit for a little longer)
400 Elite

Getting to 250 Arcade will help them rope casuals away from the Wii. A 100 dollar price difference will rope everyone away from the PS3. Sony would be forced into insanity trying to justify another price cut on the PS3. Nintendo wouldn't be as pressured, except they are still struggling to meet demand. Any unfulfilled Wii customer could become a 360 customer for no extra cost.

Having the Elite for 400 would nicely tie in with "hardcore" gamers who need the real gaming console. At that point it's the Bluray player vs XBox's library.

I'd say pre-GTAIV as it's their best chance to keep momentum and ww sales > PS3 in '08. If 360 becomes the GTA console that'll be huge for them. After than, only as/if necessary to stay below PS3 prices.

I expect Sony would anticipate this and have some very attractive bundles at the time so more pressure on MS to do so.

price cut just the week before GTA 4...50$ on Arcade (229$) and Premium (299$) and 70$ to 100$ on Elite (379$-349$)

i agree, price cut when GTA IV comes out

I reckon they'll stick with small price cuts. Probably one in the new year before GTA.

If they have a really great christmas compared to sony, maybe not. But if they're within 15% of PS3 sales, I reckon they'd go for another cut.

ms needs to drop the price of the xbox more in the eu than in america, if they want to stop sony catching up with them in pal regions

With the install base advantage the 360 has in America, plus the extremely minor fact that they will have exclusive DLC for the game ensures that the 360 will be "the platform" for GTA.

But of course we already knew this, since the console has been out for twice as long.

IMO A lot of people will look at brand name, hardware reliability, blu-ray, 08 exclusives and will go towards PS3 though. Maybe not so much in NA, but definitely in PAL.
Given this knowledge, the time between now and the launch of GTA is huge for sony.

@OP , so if Microsoft doesn't launch a preemptive strike (price cuts) sooner than later- the only market they will outperform Sony in software sales for GTA will be NA.