I think the effect on Sony will be a negative one. Microsoft should initially see a sales increase of 150% given that is in line with their last price cut surge, and given how extreme this one has been. After the first eight weeks of this new price remember Grand Theft Auto will see its effect become apparent for the last four weeks of said period. The price should stabilize around sixty to seventy percent above the current base line given the strength of the cut.

The 360 should average 110,000 console sales per week for the next eight weeks. While the PS3 sales should remain unchanged since the consoles sales do not seem to surge based upon game delivery, and they seem indifferent to 360 sales in Europe. Which is in accord with what we know of last years sales. Microsoft should no less generate an additional quarter million is sales beyond Sony during this period before falling to parity with the PS3.

First eight weeks

360 110,000
PS3 75,000

After eight weeks

360 75,000
PS3 75,000

This is what previous trends would tell us is the likely outcome of the price reductions Microsoft has previously had. The sales spiral up and then the plateau they do not spike, and Microsoft uses a huge release a month later to maintain their current momentum. I am taking some liberty with 150%, but I am also including the lower tax brackets that now have effective access.

Basically Microsoft is probably being very effective here. They had many more months to generate profits, and if this scenario holds true they will negate the last two months of lead by Sony before all is said and done. The net effect on Sony is that Microsoft will initially surge a quarter million more units into the others market, and fall into parity with Sony after that.

By the by every console manufacturer gouges the European market place for whatever reason or another. Every console arrives there more expensive. Worse then that they get shafted on delivery. By far the worst offender hasn't been Microsoft. Sony has done much worse by the continent. They delayed the launch of their console, and haven't done an effective job of delivering titles in a timely manner. Nintendo isn't much better who i Europe is still waiting for brawl.

Yet you cannot deny that Sony managed to slash their production costs a damn sight faster than Microsoft. And I didn't mention Blu-ray, though thanks for raising the issue. Game developers are seeing the benefit of Blu-ray, so I don't know where you've sourced that particular information from, a year old Wikipedia entry perhaps? I could list several major things the 360 lacks that makes it seem inferior, now you bring up the subject. What about WiFi? Or will you defend the 360's painfully obvious omission by saying "we don't need WiFi" as you did with Blu-ray? Here's another: upgradable hard drives with the ability to use any 2.5" notebook drive you so desire instead of overpriced Microsoft hardware. And another: hard drives in every console (something developers of HD games are increasingly dependent on, the Xbox 360 Core/Arcade was a bad move for MS as developers struggle to make games for both SKUs). Oh how about this one, non-proprietary technology ala Bluetooth and the ability to use any USB or Bluetooth headset you like. And how about games that are actually in HD rather than being upscaled from lower resolutions such as the almighty Halo 3 which runs in 640p for example. More? Okay then. HDMI in every console, no constant crashing and billions lost on repairs, a wider selection of games (does 360 have any "decent" casual/platformer type games such as Ratchet and Clank for example?)... phew, that was a rush. My point is, well, just that, my own opinion on the matter and nothing more. But even you surely cannot deny the 360 lacks an awful lot. I once believed Microsoft's crap about them not needing WiFi in the box and other such things, but thankfully I came to my senses. 

Anyway this has got way off topic, so let's back on topic. If you want to duke it out over which is best etc etc, meet me in the numerous fanboy threads peppered all over the off-topic section.

Back onto Europe sales, I personally think the 360 will see a bump that will last them a few weeks, to be followed by its usual downward trend. But, as the saying goes, the proof is in the pudding. I'll look forward to next week's numbers when they get published. 

I'd revise your eight-week average down by 10k, but other than that I agree completely.

We've heard a lotabout Sony's cost reductions, but Microsoft has kept theirs under wraps.  Do you work for them?  If not, how do you know anything about their cost reductions?  All we know is that they just casually knocked 80 Euro's off all their consoles,  a BIGGER than expected drop.  What does that say about their cost cutting?

Now to deal with your misguided and ill-informed feature-based assertions:

- No multiplatform game has been declared inferior by a developer based on Blu-Ray. PERIOD.

- You can buy a $10 wi-fi connector for the Xbox 360, you do not need the proprietary one.

- Average Joe doesn't have a clue you can change the PS3's HDD, fortunately the Xbox 360 is the only console with a 100gb+ HDD available.

- The arcade is now at a mass market price, why do you consider that a bad move for MS?

- Very few PS3 games (and no high-physics, high graphics PS3 games) are in 1080p.  Call of Duty 4, one of the most graphically intensive games ever released, was 600p, JUST LIKE THE 360 VERSION.  Buy a PC if you want consistent high-definition mate, cause Sony lied to you when they said you'd see regular 1080p 60FPS gaming on the PS3.

- As for the console's respective game library's, you picked the ONLY genre where the PS3 has the Xbox 360 beat.  The Xbox 360 has more, better racers (FM2, PGR3/4), shooters (GeoW, Halo 3), WRPG's (Mass Effect, Two Worlds), JRPG's (Lost Odyssey, Blue Dragon, Eternal Sonata) and FAR more RTS games than the PS3.  In fact, the PS3 isn't even the best platformer console, the Wii is. 

Having read this, it's time to "come to your senses" for real!!!!;)

Sony should match the price cut with the release of MGS 4.

Starcraft i bet when ever you see your own sig you have a warm fuzzy feeling go up your back knowing that your precious 360 has 6 "must have games" while the ps3 has none. I find it ironic that with the lower price point and 6 "must have games" the ps3 still manages to outsell the 360.

Really? I don't.  12 years of leading-brand recognition can do that for a console.  I find it ironic that Sony was so confident it would crush the competition this generation if they could just shutdown Microsoft, that they forgot to watch the company they originally stole the crown from and are now lagging far behind in last place. 

Sony must cut the PS3 price soon not wait out until before Xmas 2008. Cheaper price represents value people like cheaper consoles. Sorry for all those people who got ripped off by Sony paying $600 US on its launch. Over in Australia it was $1000 AU for the 60GB PS3 model with no games on launch day March 23rd 2007.
PS3 40GB model retails for $399 US.
Now the price in Australia is $700 AU for the 40GB PS3 model with no games.

The price cuts of the XBox 360 is a great thing people prefer the cheaper console which is value for money, they do not like being ripped off by some faceless corporation.

I'm really not sure if it should count for your post count if you copy and paste the same response to as many threads as you think it would be applicable to.

Well you are not caompletely fair here,,if you want value for your money,  PS3 is already such a great value.The machine costs $900 for sony to produce and you are buying it for 400-500 bucks.That's a pretty good value to me as a customer,,sure it's not great for them,but I am not a sony share holder.