No I meant Killer. He is worse than GEBX and SKILLZ combined! (j/k)

 I wonder what would happen if DMeisterJ said that to Nintendo Wii fans? All hell would break lose.

I'd guess there are a few reasons behind the lack of price-cut:
- the exchange rate. (they probably purchase components in non-$ currencies..)
- having to design to fix the RRoD issue, rather than to optimize the console...
- the console is already fairly well optimized, cutting costs is hard.
- if they cut $200, they'd be giving them away.

I'd guess the exchange rate is probably the main cause, along with a desire to make a profit.

I actually don't think MS needs to drop their prices in North America unless they get their butts kicked in GTA. I think they are betting on the exclusive DLC to help them there and that the price drops will come oh, right about the day the first heavy wave of MGS4 stuff hits around the end of May or early June.

Make what you can off the GTA launch and see what sales do. If the numbers are ugly, drop the prices. But remember they have to recoup $50 million on GTA - giving it away in bundles isn't necessarily a great plan there, in addition to the fact that it would be super rare for anyone to bundle an M-rated game in America.

1 and 3 are basically the same. This is the issue I have been talking about for a year now. Sony is one of the best Consumer Electronics companies out there. They regularly compete with the links of Samsung, Toshiba, and other top quality consumer electronics companies. MS is a baby when it comes to this kind of market, and they are competing with one of the best companies at it in the world.

MS will fail when competing against Sony (or any other consumer electronics company) when it comes to making a piece of consumer electronics. So, where Sony designed a unit that easily become less expensive over time, MS did not factor this into their design (or if they tried, they failed at it miserably).

MS does not reduce the cost of the 360 because it does not cost that much less to make today than it did when they release it.

As for point 2, MS just dropped the ball. Again, they are the new kinds on the block here, and some lessons are learned at a high cost.

Because the competition is outselling the 360 it does not need to cut prices that would generate losses just to get extra consoles on the market. 360 has sold around 11.5 million in the Americas alone a good market indeed after 2 and a half years in one region. 360 sales same time last year have increased significantly in comparison to last year in the Americas too.
Profitability is MS's main aim regarding its Game division, revenue will be generated from Xbox Live subscriptions, software sales, accessories, DLC,etc.

360 doesn't need a price cut in America because it's doing very well compared to Europe which is very favourable to the PS3.

I think it's pretty obvious that right now, profits are more important to MS than marketshare.

Still, a price cut in NA would go a long long long LONG way right now. I suspect the 360 would start trouncing the PS3 again in America if it was to happen right before GTA IV.

 there are still a few xbox fans on this site thats a bit out there and several that have been banned.

Nice post. Point 2 is misleading. Sony introduced a new sku with a $400 price point. In reality, they have only had a 100 dollar price cut.