The reason I stated what I did was this - MS is in the biz to win. They are not afraid of an enemy gaining ground, then cutting them down and forcing them into submission. Look at how long the 360 went with just one price cut - nearly 2 years. I expect them to do 1 price cut this year. Why? Easy ... they'll hold off Sony without any real loss. (like they are doing now) - they are hanging with the PS3 without going into the hole. The 360, at this stage, is either losing very little money or turning a profit for MS. They can afford to lower prices and still make a small profit. Sony can't. They are going deep into a deficit to move consoles/cheapiest BR player. They are going for penetration right now - they are hoping to get their money back off the expenisive BR disks. Developers want to get paid. They know the Wii is popular, but could end up being a money pit because grandpa and grandma love just one game - WiiSports - and their grands only like Mario. Anything else? It's a gamble. The PS3 has the most potential - but just like a rock on a cliff - it can't do any damage until an outside force enacts pressure. The PS3 may be one processing giant, but if devs see modest returns, there's no need for them to wonder if 'Are we going to make enough to keep the lights on?' They know on the 360, if it's a quality game, it will sell. Some games don't fall into this and are good, but it's rare.

The $50 price cut will stimulate sales and then ... when Sony matches, they'll go for the kill. Early next year, MS will drop to $199. Mark my words - Jan. 17th, 2008 - in early 2009, with a still hefty lead over Sony, and narrowing the gap with the Wii, MS will drop the hammer and hit the $199 mark before the Wii and the PS3. When that happens ... look out. And not just here in the U.S., but worldwide.

Lol, that would require a lot of patience on MS's part Madskills. My only issue with that is games. I genuinely believe Microsofts line-up will remain better than Sony's, with wonderful new IP. But that doesn't change the fact that Sony has gaming franchises that are well known and will move consoles because of it. I would think if Microsoft wanted to deliver a killer blow, they would need to do it well before the arrival of the FF's and GT's.....

X360 price cut would be around sometime in April when GTA IV releases. Microsoft will do as follows:

X360 Elite: $400
X360 Pro: $300
X360 Arcade: $250

That's what I'm seeing this coming spring. If not a $50 price cut on the high-end models. It sure will be on the Arcade SKU.

Price cut will be for the launch of GTA4 (if not sooner), as that game, more than any other, has the possibility of boosting PS3 sales. The more bites that the 360 can take of that apple, the worse it will be for Sony. That's why they paid for the exclusive content.

However, the Sony people are likely to be loyal - many might never have owned non-Sony systems, and they are likely to look beyond GTA4 to MGS4, FF13 and other, traditional PS titles. However, $400 is still a lot more than most are willing to spend on a VG console so there's a limit on the number of people who will be able to jump to the PS3 just now (likely the main reason 360 hardware stalled most of 2007, too). Thus MS has to sweeten the deal as much as possible to get those Sony gamers to jump now, and not wait for another Sony price cut or two. I expect a minimum $50 price cut from MS, but that was met with a collective yawn last year. Heading into their 3rd year, it is hard to imagine them still being within $100 of launch prices (has that EVER been the case for any console?). Really they are well behind the price cut curve, and I expect that I am not the only gamer anxious for them to finally get serious with their price reduction.

360 Arcade: Drop fro $279 to $199. Also expect them to mix up the game assortment, maybe even toss in a packaged game. This puts the 360 into the "sweet spot" for mass consumption. (Note: I think it is possible that the Arcade will be cut all together, but I can't predict that without knowing how it sold for them last XMas).

360 Premium: As the "staple" console it needs the biggest splash, just like last time. I think $250 is the best move. They may only go to $270-$280 in order to avoid cannibalizing Arcade sales, but if they cut the Arcade out completely, they almost have hit $250 in order to avoid the unhelpful PS3-ish debate over whether a price cut really took place at all.

360 Elite: Money is less of an issue to those buying the elite package, but it is also the most direct competition for the PS3. Keeping a high ceiling will make the PS3 look more attractive, but it might also keep Sony from too agressive a response. However, with the Premium now also coming with HDMI ports, basically you're paying for a cable, 100G and a black finish. I think it makes sense to cut it to $350.

As soon as possible and by as much as possible.

MS is a very patient copy. The Xbox was just a trojan horse to get the 360 to the table. If it worked, cool - if not, they were expecting that too.

The big difference between the Xbox and the 360 is - the appeal and its dominance over Sony - for the time being. Sure, Halo 3, Mass Effect and Bioshock are out, but don't for once think MS has used its big guns yet. MS was the one who pushed for a later GTA IV date. Remember?

If not, here's a refresher:

Wedbush Morgan analyst Michael Pachter, in his latest assessment of Take Two, said that the publisher might delay Grand Theft Auto IV so as to move it farther away from Halo 3's September 25 launch. Currently, GTAIV is expected October 16, just three weeks after Master Chief moves in.

"We believe that a two-week delay would provide a reasonable gap between the launch of Halo 3 and the launch of GTA IV, and would actually help sales of both games," he said.

Source: http://www.joystiq.com/2007/06/01/pachter-halo-3-could-cause-gta-iv-delay/

MS ALWAYS wanted GTA IV delayed. MS knew it would steal Halo 3's thunder, and they needed Halo 3's thunder for the stockholders. Now, even though I am a journalist, this is all speculation ... but ... using some deductive reasoning ... MS offered R* $50M for extra content ... but I can bet you cash money they asked R* to delay the release. That way, Halo 3 would have its thunder, R* would get paid for content AND to intentionally delay its release. Who benefitted from there? MS and R*. Sure, the financial reports looked bad now for R*, but they had that money in the bank - like a postdated check of sorts. It's good either way for R*.

According to the NPD numbers, MS had an awesome Christmas. Mass Effect sold well, as well as Halo 3, and several other multiport games on the 360. MS is just grinning. Now, with the holidays behind us, MS has cleared the decks for GTA IV. And MS, once again, hasn't even showed its cards for 2008. There's no need to. If blood is in the water, sure ... but not now. And watch MS tout the devil out of the GTA IV extra content.

I saw MS laying a trip right in front of Sony - and coming out strong in 2008. All they need to keep this competitive is to offer bundle games (Gears - though its old/ Blue Dragon/ Mass Effect) and watch sales skyrocket.

I am looking at this from a purely business standpoint. MS rarely - RARELY makes mistakes. That's my plan if I was running the MS entertainment division show.

For Sony to win, take the loss and force MS to counter. I would also sign tons of exclusive games to the system and get the games out, not delayed. One delay and our contract is null and void. Time is of the essence. I would rather win and leave on top or a close second than win by default. 

Pardon me, Mr. Madskillz. I have Misters Vista and RROD on the phone for you.

But the issue with MS's 2008 games is purely brandname. They will have games just as good as Sony, but apart from Halo Wars and GTA IV, most of them are unestablished new IP. Thats why I want an AGRESSIVE price cut or two, smaller ones over the course of the year (before GTAIV then before Christmas).

My point is that MS does make mistakes - big ones, even. It's just, like the Yankees, they have enough money to keep those mistakes from crippling them. I also think they mishandled the 360 in 2007 - the PS3 has too many headline titles coming in 2008. MS should have been even more agressive last year, to keep Sony from capitalizing on these games. Now they've let the PS3 off the mat, and are trying to fend off the perception that 360 is going to lose.

For the record, I'm a Wii owner and XBox owner, and am dying for a 360 cut so I can finally play Dead Rising, Mass Effect, and Bioshock. And I will never own a PS3.

However, I must disagree with your assessment of the 360 lineup. As Sony has learned, new IPs that appear promising in January can prove embarassing come December. GT, FF, MGS all have proven track records. Alan Wake does not (and only the geekiest of us would know the connection to Max Payne).

 I also want to say that one big price cut would be better, PR-wise, than 2 small ones. A couple of quick adjustments injects uncertainty in the market - if MS cuts prices every 6 months, a consumer is likely to be willing to wait a few more for the next bargain. It also implies uncertainty on the part of MS, if not outright failure (cutting price again? First one must not have worked!). And of course psycghologically, $50 cut doesn't look as good as $100 (which is why the $30-$50-$20 cut was referred to as a "$100 cut over 3 systems" in the press releases). A $100 cut by MS would be a bold move that, I think, would convey confidence to the gaming audience, and likely allay fears that an even cheaper price would be coming soon.

@Starcraft: I'm sorry, but that's just incorrect. Wrong. 100% wrong.

-Splinter Cell Conviction.
-Ninja Gaiden 2
-Fable 2
-Banjo Kazooie 3 (if it comes out this year)

Those are just the ones I could think of that met your criteria.