Apparently, outside of the mentioning of some game titles, the BIG thing now is, "Just wait until Sonly slashes prices on the PS3, then it will beat the 360!"  Well, if Sony slashes prices $50 or $100 and Microsoft follows suit, would the PS3 still do gangbusters and take second place?

Microsoft is cutting the price this year regardless of whether Sony drops the price or not.

Personally, I think that the majority of ps3/360 purchasers have decided on which one they want at this point. With the arcade at $200, I think most 360 "wanters" can now afford one as opposed to ps3 "wanters" who are still left in the dark with it's pricing. Thus I think a ps3 price cut would have a bigger impact than a 360 one at this point. This is just my reasoning and isn't based on any verifiable fact so take it with a grain of salt.

However, I don't believe that ps3 price cutting would be enough to boost it past the 360 while this gen is relevant because it would be too little, too late. The best ps3 would accomplish is outselling the 360 WW weekly like the ps3 does to the wii in Japan now.

this was posted on kotaku on january that MS expects sony to slash ps3s

http://kotaku.com/5125706/microsoft-dates-playstation-3-price-drop-for-springtime

well 99$ gamecube didn't help nintendo overtake ps2.

sony still have to play it big game card, and many price cuts even if 360 gets one.

there is going to be a point 360 can't cut put more. or doing so won't do much.

if ps3 can pull ahead there is nothing microsoft can do and that will be mainly because most of the games are multiplatform.

i like microsoft to feel pressure to make Xbox live free, and redesign the console so its reliable.

problem was that the Gamecube just didnt have many appealing games.. which was one of the reasons I traded mine in for other stuff

game are multiplatform, sony at the end of this gen will have a huge catalog of first party  exclusives way bigger than microsoft.

thats the thing. and  360 feeling pressure may means things like xbox live free ;)

As it stands the Xbox 360 has a far larger library of AAA titles than the PS3, and just as many likely AAA titles on the horizon.  Sony's first and second party hasn't actually produced that many AAA titles so far, and with the exceptions of GoW3, Uncharted 2 and GT5, there are aren't really on the horizon likely to obtain this status. 

As Microsoft has a larger and faster growing userbase, it is also far easier for them to convince third parties to make exclusives, and far easier for them to make the money necessary to invest in more games and make price cuts.

Guys, the 360 is up year over year, and last year it was up over the previous year. It's selling great, and I highly doubt they'd drop the price again just to boost sales up a little. They're probably making a good bit per system sold as it is.

Honestly, they have an 8 million lead over the ps3. They're not gonna sacrifice a good bit of profit just to keep the ps3 from outselling them a bit over the holidays. I don't think they're that worried about things.

And as far as stealing sales from the ps3 goes, if they're not doing it at the current price points, they'll never do it.

If they did for some reason drop the price again this year, it'd probably only be to $179.

I agree with makingmusic that Microsoft is not going to make more than a tiny cut from the Xbox 360 unless some unforseen event (far more than a Sony PS3 price cut) caused sales to TANK!!!!