Well, I only say TGS because it's there at the right time. If it wasn't I'm sure they'd still make the announcement roughly around that time frame.

If MS has any intention of winning this year they have to cut to price.

While I don't think a $50 price cut is going to have a massive boost it should be enough to secure PS3 as the number 1 selling console globably for 2011. If prices had stayed the same I think 360 would have had the better year by ruling the holidays but now that PS3's cut momentum is going to be on their side.

So basically whats more important to MS, keeping their profit margins high or staying ahead of Sony in marketshare. I don't have an answer to that but that is the key factor here.

$50 off standalone units you're right, will have same impact as PS3 $50 cut. But if/when the cut Kinect $50 with it, that means the bundle goes down $70 - $100 (whatever they choose) which is obviously significant, especially as in the holidays I bet Kinect bundles are over 50% of 360's sold.

I think it is a first that a console coming in its 7th year (!!!) still has a SKU for $299.

Seece is right about the timing.

September with Gears, October with Forza Motorsport 4, November with Halo CEA and Star Wars Kinect.

Things might look like this:

Xbox 360 4GB: discontinued, available for $149 or even $99 as long as there is supply.
Xbox 360 4 GB with Kinect: $199
Xbox 360 250 GB: $199
Xbox 360 250 GB with Kinect: $249
Xbox 360 special edition with Gears of War $249
Xbox 360 special edition with Star Wars and Kinect: $299

Kinect standalone: $99

You want to know my opinion...Its all about market share, market share, market share. IMO Microsoft is more than willing to take a hit in revenue if it gives them a boost in market share. In business many times you have to make some sacrifices in order to stay ahead and beating your competitors in market saturation. You can count me on saying a price cut will come from MS before middle of September.
IMO it would be almost foolish for MS not to respond after a price cut from their competitors. Even if a $50 price cut on PS3's won't bring huge boosts in sales they still have to deflate any momentum that it may give their competitors. That is business at its core.

So yes, MS will cut their price fairly soon after they judge the effects of the PS3 price cuts. I would look for across the board cuts of $50 on all hardware.

Oh I totally agree if MS were to cut $50 off the standalone consoles and an additional $50 off Kinect / Kinect console  bundles they will for sure win 2011.  That would have a MASSIVE boost with the casual consumers who are the ones that drive 90% of sales during the holidays.  I'm just saying if MS doesn't cut PS3 and Sony have 2011 in the bag.

This! This is a business move that would make sense to me. Market share is more important to MS IMO.

I can bet that M$ won't cut the price this year :)

Is this an official Sony pricecut?

Yup, $50 of 320 and 160 in US and 50 Euros off 160 in Europe, no price change for 320 there.

Japan down to 25k Yen