That's not what I meant. Was the following price increase after the temporary drop ever accepted by the customers or did they just wait for the next price drop. 

It's called sales, happens twice a year and works pretty well every time.

That doesn't sound like a smart move. They might get more sales but that sounds way to risky for profit. It could even taint their image seeming desperate. Just 'cause you can afford to bleed money doesn't mean you should. Anyone have any idea how much profit or loss they get from Xbone currently?

People forget that this is a great time to start to, get people to blow their loads (of money) now to guarantee they won't have to choose later if Nintendo or Sony decide to make a cut. Plus it's good timing with a lot of great games being released over the next 2 months and this will allow them to make up the money in extra software sales and XBLA titles. Plus the more people that get it, means the more likely they will recommend it. It's still early in the generation and the more sales you get early, will pay off unlike Nintendo which is sticking to their price which is killing their software sales and titles that are coming.

You need to get people in early to warrant future software sales. When all is said and done, MS will get tons of extra owners on top of what they would have gotten with the holidays and new games, and that will pay off more long term, than a small loss now.

Temporary price cuts don't work. What happens is the following month is so bad it balances out, but the months after stay low.

What we are seeing now is more than likely a permanent price cut using the word temporary to draw a sense of urgency. Microsoft hasn't been known for being upfront and honest lately. This is just a textbook example of basic marketing that fits the Microsoft we know.

They are smart for boosting demand in the short run but after they are over, sales return back to their old levels. Maybe they go even lower.

Well even if the price goes back to $399, we can expect a massive sales decline regardless because the holidays will be over.

Anyhow, even at $399 good software bundles can help stimulate sales in the slow months. But around this time next year I expect a $299 X1.

Wouldn't surprise me if they kept it. They want to build momentum this holiday and this is a great way to do it.

Sony has to react somehow or risk losing the gap they have in the US.

I thought M$ were smart to offer limited discounts like they did with 360 at Wal-Mart. That way you can keep close tabs and control your 'losses'. Plus a bigbox would share some costs knowing they got people in the door. This two month free-for-all seems out of character and way more risky. Had to be done I guess.

They could offer something free with the $400 sku in Jan to ease the transition. MCC promos and H5 beta access will be farther down the road. Sunset maybe? They'll need to do something or eat potentially big bucks at $350 and $450. I don't suppose the Cortana interface is ready for general consumption. Years away.

So on topic they're temporary fixes for what is a longer term problem. The drop causes other issues. Doing nothing just wasn't an option.

Yeah, I see them keeping the price permanent. If not, then it'll really decrease the percieved value of an XBO, and might kill momentum in 2015.