What time frame should Microsoft counter with their own price drop and by how much?
I am thinking the right and smart decision is to wait about one month and see how much of an impact the immenant PS3 price deduction will have. I think the perfect price cut in either early summer or late summer should be as follows if Microsoft were to make such a cut:
elite: $299.99 with increased HD space of 200-250 GB. That way it matches the premium price of the PS3 while having the HD space to justify its premium price.
pro: $229.99 with same specs.
arcade: $169.00 with same specs.
I think if Microsoft stick with my suggested price-cut, along with a couple of huge unanounced new AAA games along with a semi-megaton announement (they seems to have one at every E3 from GTA4 to FFVIII), then I don't see no reason why they shouldn't be able to maintain or increase their lead next year over Sony.