I can't tell if you're being ironic or not, but I do believe it was planned. I seem to remember at least a few people suggesting this is how it would go down, too. The 20 GB pricing clearance price seemed to fit, but that was only $20 more than a $279 Arcade. So $199/$299/$399 makes sense.

I guess every time a company slashes prices, it's screwing over customers. What illogic.

No, every time a company launches a system at a price, then price drops weeks later it is screwing over customers.  It's complete and utter BS that it was planned.  And yes, the pro was priced close to the Arcade, but what you have to understand was that was supposed to be a limited time.  So those who rushed out to buy a 300 dollar 20 gig pro, thinking they got a deal, are screwed out of forty extra gigs of space by what?  Six weeks.  And those that bought a 350 60 gig pro are screwed out of fifty bucks for a price drop on an item they bought six weeks ago.

Unless M$ planned on screwing it's customers over, it was desperation.

a bit of both in my opinion. but more desperation than boldness. it's bold to be able to sell your console cheaper than all you competition, but it's desperate considering that it was only a reaction to sub standard sales and being outsold constantly. you could tell they wanted to save the price drop for something else, but was forced to use it now.

If anything, that was the boldest move by MS.

Personally, I didn't think they'd have the arrogance to kick any consumers who recently bought the 60GB at $350 in the balls by dropping the price this early. If I was among those consumers, I'd be a bit upset. But, buyer beware would be the lesson learned I suppose.

What they should have done, was the same thing Sony did in phasing out the 40GB SKU: scale back shipments until inventory on the discontinued SKU dried up, then introduce the new SKU at the same price. Yes, they took a hit on potential sales from customers unable to find a $399 PS3 during that transition, but the upside was that no further discounts were necessary to move remaining inventory.

Anyway, the price reductions were overdue. The $20 drop on the Core/Arcade from it's $299 debut was a joke to say the least. Going with an additional $80 drop after three years on the market is simply a price correction.

Most people are still overlooking the fact that the price reductions would have most likely come much earlier had it not been for the effective price per unit increase in average production costs due to the open check written for RRoD repairs.

Also, everyone is more or less in accord in saying that Xbox sales had tapered off prior to the inventory clearing sale.

That demonstrates that the market for the console at the current prices was nearing its saturation point. Once that happens, the choices are either stick with stagnant sales rates, or drop price to open up lower price demographics.

It was the only logical choice for MS and should save them from having an underwhelming holiday season.

who cares, only SALES matter. =)

so far, M$ knew, that they can`t win this gen, but atleast they can do everything, to expand their userbase. =)

price drop in effect on amazon.

http://www.amazon.com/Xbox-360-Console-20GB-Hard-Drive/dp/B000UQAUWW/ref=pd_ts_vg_69?ie=UTF8&s=videogames

whoever doesn't pick this up is a fool.

So how were they supposed to price things in the interim? $279 Arcade/$299 20 GB/$299 60 GB? They could have waited on the launch of the 60 GB, I guess, but when they launched that it could be the same thing all over again. "M$ screwing the customer again! They could have gotten 40 more gigs if they had just waited six weeks!"

I guess when $ony (lulz) drops prices after denying it in the run up, they're screwing the customer. Except they're not, because those people have decided the PS3 was worth the buying price. If the price drops soon thereafter, they might feel unlucky but they shouldn't feel ripped off.

And if you don't think it was planned, I don't know how to convince you. But if you read their statements over the past year, you'll see a lot of stuff about $200 being the magic number. This has practically been telegraphed to anybody who's been paying attention.

Meh it's just a smart financial move, it most likely would have occurred regardless of the position of the ps3. With all the improvements to their production line It's almost expected they would lower the price.

200 being the magic number doesn't mean anything.  They can say it all the time, but that doesn't mean a price drop is on the horizon.

And like someone else said, what should have been done was scale back shipments of the 20 gig until the 60 gig came out, so it could have been a smoother transition, much like Sony did with the phasing out of the sixty gig, and the introduction of the 40 gig.  And much like Sony just got done doing phasing out the 40 gig and releasing the 80 gig.  You see they didn't introduce the 80 gig for more money than the 40 gig, they just phased it out smoothly. 

That's how it should have been.  The lack of planning shows in that instead of phasing it out, they just dropped the price on it, then introduced something new, and price dropped that too.  And this is something that MS did fine last year, when they introduced the Arcade, and Phased out the Core.  They did it perfect last year, so it's weird that this year they didn't phase this out, which makes it seem less planned.