M$ would be smart to do as large a price drop as possible, they are laying way low. A big price drop ($50 to $100, though I know $100 is a huge drop) would cause much disruption and would be a strong chess move against Sony. I believe Sony is not able to drop the price quite yet, and an HD console below Wii price (arcade), and a full model close to Wii price could really make an impact over the summer and then holidays. Especially with the library of AAA 360 games. They could even do an aggressive budget line of software to sharpen the blow. Imagine if Bioshock, Halo 3, etc were $29.99 (or $19.99) with a sub $200 arcade and a $250 full model.

M$ should leverage what it can to slow down the rising interest in the PS3. Sony is finally getting some good titles, though I heard a really dissapointing review of Haze this morning, they called it a boring, bland Turok. I hope that isn't correct as a lot of people are hyped for the game.
Though a price drop would hurt in one sense, M$ is making money from Live and software, DL content. Component prices have dropped, and it might make a great finishing move to the PS3 in NA. Especially if they could pull it off quickly. It needs to happen in the next 30 - 60 days, but worst case scenario would be a month before Madden 2009.

I'm sure it will happen before Banjo & Halo Wars.

Thoughts?

-Edited by moderator 

Yeah MS need to make a move soon in NA. PS3 is building momentum in NA and MGS 4 will be here in 4 weeks time.

If they did a big price drop the week before MGS, it could make a huge impact.

Businesses don't care about "winning" they care about profitability. Lemme read your post then give something more in depth.

At first I was gonna reply with the standard Others discussion about how 360 is cheaper there and still getting beat but NA is a different beast. I think a price drop with aggressive pricing strategy on games like you mentioned could give MS a good amount of extra momentum. Definitely enough to get back over PS3 temporarily (maybe not after MGS4 though).

Especially if they advertised it right and maybe even tied in the X-mote to a massive PR blitz.

MS has lots of money to burn, they care about market share and slowing down PS3's momentum. Short term pain for long term gain.

More consoles on market = more customers who will buy games, sign on to XBox Live and bring in more money to MS in the long run.

Money is made on the game sales and XBox Live subscriptions. It does not matter if you make a smaller profit on consoles by cutting price of the consoles. By August a new cheaper XBox 360 and a cheaper PS3  models will be available on the market.

In some ways, MS has already "won". Thanks to Nintendo, Sony is seriously weakened throughout the world. Now MS can concentrate on profit and try to expand their market in every region, which appears to be happening. The 360 should finish with no less than 35-40m sales, up considerably from the Xbox and its 25m userbase.

MS will also be launching first again next generation, giving them the ability to correct their mistakes from this generation and try to expand their market again.

In the short term, though, there is little to be gained from them throwing money at the problem to weaken an already weak Sony when they can sit back and try to turn a profit on the 360. No matter what they do, the PS3 will probably end up passing the 360 in WW sales anyway.

I don't think a price drop would drop MGS4 sales. People are buying MGS4 and the PS3 for the game, not for price, but a price drop for Gears 2 or Too Human would work better. Price drops to hurt the competition don't really help. MGS4 hype is crazy.

Firstly a price cut would most certainly improve the 360's position but it would also severley damage MS's profitability $100 dollars ? with the current state of the US economy that's really a no go area if MS do actualy care about making money of the 360 , the current strength of the US dollar just won't facilitate a price drop as well as it would have a year ago.

I saw a good review for Haze ( I think it was PSM , but then not the best source for un-biased stuff ) Not really relevant to MS's efforts though. Haze is only one of many software titles about to hit the US MGS4 being one of Sony's most notable releases this year followed by R2 and LBP being big releases towards the end of the year. MS's biggest threats to these are IMO GoW2 ,Banjo and one other title I can't remember.

Keeping in mind microsoft has made a 7 billion dollar loss on the 360 they're not really making any profit of the 360 , they're unlikely to profit of the 360 this generation , the most they could do is recoup some of the losses they've made.

Halo Wars is an RTS and they generaly don't do well on consoles , but the Halo name might help it get 1.75 -2.3 mill maximum. As for Banjo another one i'm not too sure about , the gameplay mechanics have been changed alot but i'm sure alot of Promotion and smart marketing on MS's part will help sales of the game.

MS are in a really weak position this year I think they're strategy this year would be to maintain their momentum and keep their competetivness , this isn't MS's best year for software.

rocketpig , you consistently proove yourself to be an MS fanboy , many of your posts are riddled with bias and incosistencies.

Firslty MS hasn't "won" anything it's quite on the contrary , MS stand to loose the most from this generation ( in terms of profitability) . Where have you got the Idea that Sony are seriously "weakened" like the PS3 is the only console affected by the release of the Nintendo Wii.

The only thing MS  can concentrate is avoiding irrelevancy with it being outsold on a WW basis week by week since Janauary , Japan's interest still at an absolute minimum and the PS3's strongest line-up of software since launch.

If MS launch again first it'll no dought damage consumer confidence in the 360 , receive poor software support due to the high costs many developers will experience with new technology , hardware , software , trainning obligations etc. Also taking into consideration it'll damage MS's profitability further if the 360 doesn't have a decent life.

What are you talking about an already weak Sony ? , Your coudln't be referring to the PSP that sold more than 20X the number of 360's in japan could you ? or the PS2 that continues selling like crazy years after it's launch ? or maybe the PS3 that's outselling the 360 on a weekly basis ?