MS has proven they do price cuts when they want to. Going nearly two years without a price cut is impressive. Dropping it $100 would be ideal for some gamers, but not MS. As DMeister J stated, they don't feel the PS3 is a real threat, when you consider Japan is the only reason weekly they are getting beaten. Sure, others is slipping ... but not by much. Their primary stronghold, the U.S., is filled with hella cheap gamers. They are tossing carrots to Japan, but they aren't biting as much. So ... doing a $50 price cut, and another $50 price cut when Gears II hits would really be more effective in the long run. That why, it will look good on the quarterly financial reports for two quarters, not just one.

MS realizes this console war can turn at any minute. They are treating this like a marathon ...

Let's say MS drops it $100. What happens when the steam runs out? Pace yourself - don't show all of your cards or do acts that may be looked upon as desperate. Let Sony panic ... let the financial gurus speculate ... but stick to the game plan.

Exactly, what madskillz said. They don't want to use all their cards with a huge $100 price drop. $50 drop around early April seems to be what most people are expecting (now that GTA4 has a release date). A $70-$80 would be better IMO, kind of in between the large drop $100 and the minimal $50 drop.

I would like to see a $100 drop in Japan though (so I can buy a cheap Elite ;-p )

I agree madskillz.

$50 drop before GTA and another $50 before Gears. That would be a great move by MS.

What if Gears 2 doesn't release until Holiday 09?

I really doubt MS is concerned with these weeks when they are being outsold by 15k world wide. Now if that increases it might be diffrent but as it stands now their large lead gives them an edge when they do further drops.

hahah whats desperate? outselling xbox 360 at a higher price in every region but U.S.A? Sony saying in Pal regions they should have beaten 360 TOTAL sales in summer? or that a higher priced system is outselling xbox World wide for like a month now and it seems not to be slowing down? i think sony is looking much better then even 3 months ago, and its only going to get better with all the good news of Blu-ray.

They will match what sony does at this point or try to pre-empt them when really good rumors come out.

What I really want to know is what Nintendo will do. Will they finally follow suit with their own reductions, which is usually the case, or will they leave and just to see what happens.

I do think that if the $299 PS3 40g rumors be true then the 360 will have to match and put all of their models in the $200-$300 range. Basically a $80 to $100 price drop for them.

Are you still going to be all sunshine and roses on January 31st?

I highly doubt it. 

I don't think MS needs to do anything here in the US...it's already selling great. I don't think they should in Japan either because I don't think it will really matter---so the few they sell there, they might as well make a nice profit.

However, I do think they need to do a price drop in Europe sooner rather than later...I don't think they can afford to let Sony start to pull away and gain momentum...They need to strike a blow in Europe now if they want to compete when the big games like MGS4 & GT5:P & KZII come out.

Although I think MS really lost an excellent opportunity to drop the XBox 360 by $100 last year (mainly due to the RROD), it is not in a bad position right now against the PS3 and they don't need to worry too much at the moment ...

Even though the PS3 is outselling the XBox 360 in most regions, the PS3 still trails in total userbase and will not surpass the XBox 360 in the near future; if they wait until April or May (or even November) the PS3 will have not eaten enough of the XBox 360's lead to actually matter.