I think the initial bump was low until the economy hit the fan... so yes MS were somewhat lucky that a moderate bump has been driven up due to price becoming much more important that it was until recently.

But then there's always a bit of luck involved in business so there's no taking away from them the price cut worked out well.

I dont think this has anything to do with luck wouldnt you think Microsoft and all the other large companies new this was comming? I mean it was startagy not luck IMO

Oh yeah. I know.  Im in Japan and all their high end exporters are being hit hard by this crisis, especially Sony.  For the last several years they have been losing out in sales to Korean companies like Samsung and LC, and even more recently Chinese companies. This is just not a gaming issue, but their entire electronics line from TV's to earphones. And they have no one to blame but themselves.  They were arrogant and allowed the competition to catch up with them. A typical example "Korean products will never match Japanese products in quality."  Its much like GM in America.  Its sad but a company has to tread carefully or one big hiccup can reverse their fortunes.

In the case of their PS3 and gaming division, this crisis can not be good. But I say the hell to them. I never liked the PS3 because they didnt commit to it completely.  Rather than make good quality games right away they focused too much on the PS2 and PSP. Ut hurt them in the beginning while they just assumed it would sell anyways.  Arrogance. As for the XBox360, MS made every effort to appease their supporters from the past generation and committed fuily to the system. They had a few missteps here and there (ring of death) but they did what they could to improve the situation while PS3 couldnt take much advantage because of their horrid game library.

You think MS knew the current econimic crisis was going to hit?  Lol!  Don't be... well, don't go there.  Of course they didn't.  They, like everyone else, are taking the hit and like everyone else will see it impact their business.  Luckily for them its good for 360, however I suspect PC sales, etc. are going to start slowing down a lot (if they haven't already) and that is sure going to hurt them more than 360 helps them.

But for the 360 its good news vs the PS3.  But having their price cut (which would have been good for them anyway) happen to overlap with an economic crisis that will drive many shoppers to the lower cost option if one is deemed to exist... that was luck.

Er, my dad has been saying the current economic crisis was going to happen for years. It's all he's been talking about because he watches CNN all day and that was all their analysts would talk about. If you think companies like MS and Sony don't have expert economic analysts who watch the market and make predictions to help their company make decisions, I don't know what to tell you...

^this

Many of the conditions that were present in the financial markets just prior to the market crash of '29 were present again even back in 2005. Some would argue even earlier. It started at the bottom with the subprime mortgage crisis and eventually worked its way up to the top, which is what the market at large has currently been experiencing.

So sure, many (most?) ignored all the signs in the interest of promoting further growth (backed by toxic debt), but to say that MS planned their video game console (read: toy) price strategy around a projected crash in the market is absolutely ludicrous.

MS, like just about everyone else, lost far more than they could ever hope to gain by selling cheap video game consoles. Don't take my word for it; look at their stock performance. It's the absolute worst it's been in years.

There is no victory here. No clever master planning of scheduling price drops around a tanking economy. Stop giving the MS accountants and financial strategists far more credit than they are due.

It's just good fortune that their product life cycle and the current cost of production has allowed them to price their console the most aggressively.

Like you said: luck. 100%

I wouldn't say it's 100%. If MS had gone the Sony way (very expensive hardware), they would never be able to take advantage of this without losing a lot more money. The luck was simply in the timing.

In any case Microsoft has done some good moves in this gen, along with some bad ones.

Microsoft is doing a great job!

Yeah, MS has really done greatly this holiday season. They don't have motion sensors or bluray. They just have cold, hard, games.

Thats how to win a true war baby. Sell a gaming console for nothing but the gaming part of it.