If it doesn't happen right away tomorrow night, then MS will sit and wait to see if the PS3 sales actually rise to a threatening level in the US.

Supposedly, the new 360 'falcon' with 65nm chips is on the way. This new system is supposed to be cheaper to produce.

Both the Wii and XBox 360 may see price reductions ...

I would imagine the XBox 360 could see a $100 price reduction in the next couple of months whereas I wouldn't expect Nintendo to reduce the price of the Wii by more than $50 and I wouldn't expect a price reduction until November; by reducing the price on the one year aniversary (or potentially bundling another Wiimote/nunchuck with the system) and establishing a strong supply Nintendo can ensure that the Wii is the hot holiday product.

Nintendo may not need to reduce the price to improve sales, but they may reduce the price to maintain momentium and encourage software sales.

Core - Discontinued

Premium - $299

Elite - $399 w/ Game (Forza 2 or Perfect Dark Zero)

Nor the wii or 360 will have a price cut, Microsoft will lose even more money if they drop the price,also the wii is doing great succes for nintendo at $249.99 why would they reduce the price? The elite was a limited edition console, the 360 wont get a price cut nor will the wii.

I've been guessing that they'll wait too see how Halo 3 and GTA 4 affect sales before cutting price. I don't think the PS3's price cut is going to change anything, as the price is still ridiculously high. The cheaper 60GB version is the same price as the original 20GB one anyway, and that didn't sell all that well.

Of course if a miracle does happen and PS3 sales increase for more than a few weeks, then MS might get scared and drop price. Still well within the realm of possibility.

If they do a $100 price reduction on all their SKU's I think they could have a lasting sales spike from now until maybe Feb. 08'. A good number of those could be from current owners trying to get the new chipset.

If Microsoft waits to see what happens and the PS3 starts to pick up some momentum, it could spell disaster for Microsoft. As bad as the PS3 is doing, they are still in the hearts and minds of a seriously large gamer base from the PS2 and the battle is far, far from over. Microsoft needs to match the $100 cut to stay the decisive price leader. If Microsoft thinks that they will win this round with an equivalently priced machine, they are dead wrong. People are putting a premium on the BR disk player even if only a small amount and in my opinion, the xbox 360 MUST maintain a $100 cheaper price to continue to stay in the lead.

My prediction is that MS will blink first and only do $50 across the board. It will cost them dearly in the long run as this point will prove critical in this generation (in the U.S.). They'll realize the $100 cut was smarter but it will be too late and the PS3 will have the momentum it needs to regain the long-term lead and put the 360 firmly in the rearview mirror.

I think they'll drop by March of 2008 if they're confident about their console. The reason for this is the holydays where they'll milk every dollar of the "Halo" and "GTA" gamers to recover from the repairs and 3-year warranty.

But I maybe wrong and they'll drop the price by tomorrow.

One thing is certain. Peter Moore is in a meeting discussing it right now :D

maybe a 50$ cut in price at the most, MS is still losing money on every X360 unlike what many may think.
MS might feel the water a bit, look at the weekly sales till E3. If PS3 has some sort of jump in sales, an X360 price cut might follow.
Personally I feel most PS3 buyers are waiting for a good games on the system.
Ninja Gaiden Sigmna + 100$ price cut might look nice but Ninja Gaiden is a M rated third person action game, i doubt it can break more than 500,000 in America and 1 million worldwide.
Even God Of War 2 has struggled to break through 1.5 million on the PS2.