I think it is as simple as the OP says. M$ knew they were completely off on the price since Sony announced the PS4 at $399. They waited to see if they would get a free pass from the public. THe public bit off on it during the holidays.

Come February(based on the announced sales in that month) they knew the party was over. They waited until Titanfall to move $50-$60 with a pack in game. And they finished it off a few weeks later with a real price cut.

The only surprise is that they didn't drop the price to $450 60 days BEFORE the system launch. It was clear back then based on internet chatter that the XB1's perception was that it was $100 more and less powerful. THey hoped that the games would come out and look good enough that people wouldn't care. Then all of the multiplats came out and the fanboys went crazy over every little detail and turned what is mostly minor to the majority of gamers into a BIG deal. With the system power being criticized, its hard to stand by the extra $100 regardless of what the system can do or has in the box.

M$ had no choice if they wanted to keep up in both the US and UK.

Most objective people would consider it as having a superior OS, superior online capabilities, and superior accessories... So to call in an 'objectively inferior system' isn't very... objective. 

Sorry but if you buy at launch you are an early adopter of a product. I would not compensate anyone. MOst early adopters would pay almsot anything for a console (within reason) so price to them is not a concern. 

...except Nintendo did drop the price of the Wii U by $50...and they dropped the price of the console itself, I might add, unlike Microsoft, which kept the price the same and simply threw in a game for free.

Most of what else has been mentioned by VGChartz has been dealers themselves cutting the price, which is in no way an official action by Microsoft (and, if we're counting that, then the Wii U has had that done to it already too)

This.  When the current stock is gone I would bet it goes back to $500.  Maybe with a permanent game now tho?

MS is definitely not doing "bad enough" to need a permanent price cut.  Tho I will say the Windows Store doing the same surprised me.

The Wii U at the moment has a great bundle with 2 games and the console for $299.99 and has a pretty solid lineup of good games on the market making it a great value atm, the only thing i would be weary of is its lack of upcoming titles. (We need more then Smash and Kart for the rest of this year!)

The Xbox One atm is over priced at $500, comes with no games and doesn't have a very good lineup of software on the market (just recently launched so this one could be overlooked). I doubt a $50 price cut is gonna help awhole lot until there's more games out to separate it from the Playstation 4 being the better value, which Titanfall was a good step forward but it's going to need more.

Yeah... Nintendo was too slow to admit defeat and salvage the situation. But the truth is, the high price was the result of the investment on the gamepad, wich hasnt really payed off yet.

The thing is, i think the Wii U only becomes appealing at 250. Still the biggest problem is the software library. Nintendo is still beeing too slow to rectify the situation. We can only wait and see what it is they want to do.

As for Microsoft, they have the kinect slowing them down, aswell as the goodwill they lost at the end of the previous gen and with the unveiling of the X1. That and they no longer have Sony making mistakes with the Playstation 4.
The Xbox surely built a brand in the US, but Europe and Japan are still very much Playstation oriented to an extended degree where its gonna be difficult for Microsoft to change the situation.
They need to recover goodwill, and like Sony showed them last cycle, its not something that comes from one year to the other. Its gonna be an uphill battle for Microsoft this gen. I guess the gamers benefit if Microsoft is willing to fight that battle.

Well Nintendo did do this last year. $299.99 Wii U Deluxe with NSMBU and NSLU bundled along. Thats an official $50 price cut by the way, and didn't change sales significantly.

No, it's not that simple.

If price is the issue then yes it is, if it's the concept/software ect then a price drop will do little/nothing.

As has happened with the $50 WiiU price cut (and any future price cut.

Won't change the outcome but u couldn't be more right.