This means Microsoft is prepared for Sony pricecut and are ready to counter it :P

They just dropped the price by $80. 

I don't think MS is going to counter anything.  They're ahead of the game right now, and it's up to Sony to counter whatever MS does (like MS is predicting them to do right now).

Microsoft is cutting the 360 Arcade's price to $149.99 sometime in the near future, and it comes bundled with Halo 4. You heard it here first!

;)

clever, MS must be hoping this will scare off some PS3 buyers who will wait for a price cut that may or may not come, very good move, anyone ever think that the console war is like chess?

Mwwwwahahahaha......(rubs hands together with evil sneer).

Seriously though, does anything surprise people this Gen. It has had more drama than a day time soap opera.

Less sales means less shipping that means less PS3s being made and that translate to less loss? :P

lol. People believe MS is saying that to hurt PS3 sales.

Sony says: "we predict RROD will fall from 33% to 0.1% on the 45nm process at the end of 2010" and voila.

Yes but they don't need to use this trick many times (assuming it works... if it doesn't, it doesn't matter anyway).

Fixed

Seriously, it's not nice, but it was an great move, from a tactical point of view. They may have just lowered PS3 sales even more, and forced thus forced Sony to bring a pprice cut further forward, so it is a slightly self fullfilling prophecy.

Less sales means less shipping means less money.  Same PS3s made means more PS3s stored in warehouses means more warehouse space needed means less money.  Less money plus less money equals more loss.

(production isn't a button that says 'on' or 'off'.  Even if they stop production, they'd have to buy out their contracts with Foxconn and anyone else they've hired to make PS3s)