If you combine it with their casual games and avatars, then yes it's deperation.

Why does everyone feel that Microsoft's price cut is either bold or desperate when it's obviously both.

The upcoming 360 price cut is a bold move out of desperation.

Its not bold or Desperate its simply business, with a few factors converging
1) Sales have stagnated on the xbox 360
2) MS is 3 years into there life cycle and a price cut can be made cause its cheaper to make the console.
3) Sony has been coming on strong this year
4)By making it now they know sony cant match it
5) Right before Christmas nice large sales boost

Business and smart business decision it was

I think Microsoft realizes that outside a small community (gamerboys with bad computers who love FPS games) which gets them to 25-30 million worldwide and no further, very few people like their console. They don't have the rabid built in fans of Nintendo or Sony built up over years of successful beloved consoles, they don't have the great first party games with the sole exception of Halo (meaning all the other games go to the PC or other consoles...hell even Halo does).

They don't have the cool brand name especially with the Vista thing. Microsoft is thought of by most of the public negatively and especially not as cool in any sense of the word. John hodgemen is the perfect representation of Microsoft in the eyes of most (the PC from the Mac PC commercials) the bumbling guy who just can't quite figure out what is cool or desired by the public. It's funny that they think an eyetoy clone and a singstar rip off is going to get them into the Wii demographic. Compared with genuinely interesting ideas like Little Big Planet its yet another example of MS being out of touch.

This move is boldly desperate. They are doing it, and taking big losses again, to try and force Sony out which almost certainly won't work. They don't really have games, they don't have the fan base and they don't have the image so they're going to try and buy the generation with loss leading hardware pricing. That WILL work, but only until the 30 million point the Xbox got near, after that they're not going to head into every household like the PS2 or PS1 did, they're not going to appeal to the mass market like the Wii, they're just rushing towards their relatively low gamerboy saturation point after which they have nowhere to expand.

I have several friends I would consider casual who have either bought or been looking to buy a console lately (many of them women) and the only two choices were the PS3 and the Wii in their minds. The 360 isn't even in the public consciousness outside of the community that bought the Xbox 1. The PS3 and Wii are still in the top 10 on Amazon while the 360 barely can make it onto the first page at number 25.

I am in NA I say 360 beats PS3 this christmas, wihtout the price cut in my opinion that would not have happened

I agree with some of this but MS taking big losses is simply not true they will still be making money on the Pro and Elite and breaking even on the Arcade.  You are right they did it cause Sony can not match them.

I have several friends in North America and I hear a lot of WII, PS3 and Xbox 360

This is desperation. MS will once again start losing money on the Arcade, which makes me wonder what is MS doing in the gaming industry at all. They have already lost 6 billion and counting. This price cut will lead to another money sink just when they have begun making a profit.

Wow there throwing out the money thing ther this generation Sony has lost more than MS and MS has been profitable with the 360 for a while now.  According to your new logic then SOny should be out cause they arent making money on the PS3.

Any desperate move is bold in itself.  But the context here is that is Microsoft having a 360 price drop because it's not needed so it's a bold move, or are they doing it out of desperation because they don't have enough faith in future 360 sales without a price cut?