@Shadowblind

He's assuring the troops, that's why it's here.

 With that logic we shouldn't shop at Wal-mart because the boxed pizza is better at (insert non budget grocery store name) since it's more expensive.

It isn't "logic" its marketing, it's what you learn in college.  People will buy "inferior"(not saying the 360 is inferior people, just saying it is getting that way with the price point) products, they always will, but the perception will be that it is worth less than the other products on the market.  Wouldn't you rather eat a Papa John's or Pizza Hut pizza for 10 bucks, or pay 7 bucks for a Wal-mart pizza at their deli?  You buy a pizza at Wal-mart because of convenience not taste, but with evey bite you regret not ordering Papa John's.

Doesn't Wal-mart have Subway pizza. I love Subway pizza.

Thats not necessarily true. They are making more money on games than they lose on hardware right now. Thats from Howard Stringer himself. They also reported a gaming division profit last report (amirite?) while Microsoft reported a loss?

So no, this will push Microsoft further in to the red. Its a desperation move, and Microsoft and Sony have basically both revised their hardware to the same point.

Both use 65cpu/65gpu.

So this conception that microsoft is so far ahead of the game and sony can't catch up is not true. Microsoft will lose lots of money to remain competitive. Sony still has the option to cut price, or keep price at the same lame to ensure they will recover losses. 

The pricing advantage was proven not to be enough earlier this year. So what this turns out to be in the end is merely desperation. They were at a lower price, but still were losing by 1.5million console this year. After not making any money last report, don't you all think they would maintain price in order to make some money if they could?

 Ironically there have been two times Sony has announced a price cut for the PS3. The 60gb "clearance sales" label was added after it was discovered a few days later that the model was being discontinued. Sony never came out and said it was going to discontinue the model at the time, but when confronted with the facts did admit the truth. Then later they announced the 80gb price cut which covered the same price ranges oddly enough.

So you seem to know more about marketing than one of the biggest companys on this planet. I think you might overrate your marketing-knowledge.

And what college did you learn marketing in, exactly?

I think During holidays the $199 arcade version will be a big seller amongst casual gamers in US. or People that still havnt upgraded. The $199 price, Fable 2 and Gears 2 will push 360 sales.

Well of course it's going to worth less thats the whole point. Smart shoppers don't and shouldn't think buying the cheaper brand means they are buying something inferior. Maybe the product and company is managed better and has less costs to make up for. Maybe it uses its own plants or facilities to produce said product internally rather than buy products/ingredients/whatever from other manufacturers. Theres a lot that goes into setting the price than just the product itself and what it's worth.

The 360 is now using a different set of components that are cheaper to make and mass produce so why wouldnt you cut the price? Cutting the price doesnt reflect it to being inferior in terms of value compared to other products. It just shows that the product can be mass produced by a more efficient means. Regardless of your views as to why the pricecut is happening the fact of the matter is MS has cut the costs to make the 360 to a degree and it is now showing in the price cut. Plus lets face they need some sales.

Don't even think of lecturing me or anyone about college as you have not even graduated from one yet.