Yeah, because price drops only help Sony, not Microsoft?

MS must make a price cut soon. PS3 is gaining momentum. The 360 has lost the past 13 weeks to the PS3 in global sales. (soon to be 14 weeks) With the Blu-ray win and some big PS3 titles coming, this does not look to be changing anytime soon. They need a price drop with GTA4 to gain some momentum, and they need to hope Sony does not do the same.

A price drop for MS is almost guaranteed. The only questions are how much, when, and how will Sony react.

In scandinavia (Other europe, probobly the same), the price is about :

Xbox 360 Arcade - 414 $
Xbox 360 premium hdmi - 510 $ *
Xbox 360 Elite - 635 $
PS3 40 gb - 650 $

Premium is the best selling version of 360, and the price difference between it and ps3 is about 141 $.
And still, 360 sells pretty good here (Inc UK).

I would think a price cut (Yeah, it will happen soon) will drop at 380 $ * (Remeber, EU), and that should be enough to boost the sales big times in Europe, not saying it will help that much in the south part (Like spain) of this expensive continent :/

I think Sony has been trying to egg MS into cutting their price again, so they appear reactionary. It wouldn't surprise me if SCE had another price cut planned at this point, but are buying time with the Blu-ray victory.

If the 80 GB + Rumble + MGS4 is $500, they may plan to take down the 40 GB PS3 to $350 (No Rumble, No Game, No BC, No Movie).

For you it wont as you have a PS3 at this point. For someone wanting to play GTA4 it will be a huge deciding factor. GTA:SA sold 7 million in USA alone... Anyone who hasn't upgraded to next gen at this point is because of money. There is no other reason to wait anymore as both consoles are becoming very good(other than waiting for price drops). So with that being a must play game + downloadable content + cheaper price for the console is a huge advantage for the 360 (if theyd o a price drop).

They bring it less, but  I think its known fact that they are producing them for less too. The reduction in manufacturing costs is larger than the reduction in price.

That being said, I dont think its possible for them to make money any time soon if forced to cut to $299. With 65/65 (if thats what the new non-bundled version has) I think they are making money on the 40gb. So I dont think its a matter of being able to if they have to.

 I definitely dont think it costs $150 less to make a Pro than it costs to make a 40gb with the 65/65 chipset. A good sign for how much the 360 costs to produce right now is the price cut in Japan.

I think the Arcade was cut to $250 or so in American money. If they were under the $200 mark, I think they would have made the price much lower than that in Japan, with exchange rates and the desperate situation in that region all taken in to account.

Sony will wait several weeks to see any potential impact on sales this move would have, they would then respond appropriately

Price cuts always help the more expensive system more than the cheaper one ( provided they both cut by the same amount)...

Especially when the more expensive one already sells more than the cheapest one before the cut....

That and don't forget the fact that if the Xbox360 drops price you get the same value for cheaper.

If the PS3 drops price the PS3 can argue on the value as with Blue Ray victory they can contend it's once again close to being the cheapest Blue Ray player on the market ( Blue Ray winning intrinseqly raised the value you get with a PS3).

I actually think neither one of the wants to cut prices first.

Sony is doing well at this price. They have no incentive to slash.

If MS cuts it by 50 Sony might counter with 100. Which would be bad news. If they cut by 100 Sony would counter at the same price and the difference would be the same and most likely benefit Sony.

The longer MS waits though the easier it would be for Sony to counter.

Scenario: Increased sales in Eu/Others for a few weeks and then back towards slow and steady.
NA would get a permanent boost with a pricecut though, but Japan numbers won't budge no matter what they do over there.