If they want to top the PS4 then they will need to keep the current pricing.

Yes, they will and everyone will act surprised for some reason.

No....they need the sales to badly for them to jack the price back up.

They probably want to to but it would cause a PR nightmare and sales would decline. The best bet is to keep the price and take the hit in profit to increase the install base and hope to baby Jesus they make up in software sales.

The biggest problem with leaving the price at $350 is that it will shape consumer expectations for the rest of the gen and essentially put MS $50 ahead of the natural price drop curve (which ought to be determined by falling production costs).  The problem this causes is people expect the console to be $50 cheaper than PS4 even if production costs for the One are not falling at that rate.  Which means when PS4 goes to $350, MS will lose ground quickly until they go to $300, which could very well put them at a $50+ loss again just as they were starting to reach a break even at $350.  Then the same will happen when PS4 goes to $300:  MS will be forced to prematurely go to $250.  A cycle of this nature could ruin the potential for profit that the Xbox One has.  And you can say "MS can afford it" all you want, that doesn't make it smart business or something that the higher-ups are interested in in the least.  The price will go back up, if for no other reason than to try and mitigate the damage. 

At $399 it would be a cold shower to the sales. I don't think it will go back to $399 for long if it does.

People get a lot more hesitant to buy once they've seen a better deal.  Look at PS4 as well after the GTA5/TLOU bundle.  With those bundles running out, sales look depressed to me.

It would be stupid imo if they put the price back up to 400. I mean like really, really, really stupid.

But the thing is, they're not loosing 100 dollars per XBO sold, and they're not gonna sell 10 million XBOs in this time period....

More likely they're loosing ~50 dollars per unit, and they'll sell ~5-6 million in while taking that loss (if they continue the pricecut.). That puts us at a loss between 250 and 300 million.

The thing is though, you said theire earnings report is likely to be abysmal. It won't be. I'm not saying that they'll be happy with losing a lot of money on the XBO though.

I don't expect them to raise it back up to 399.... and I also don't think anyone who bought it at the supposed temporary price will be mad about it for not going back up... that makes no sense whatsoever. Raising the price back up would be the dumbest thing they could ever do.

I'm sure M$ is smart enough to see they have to continue with this momentum.