MS will cut 360 50% of what the PS3 is cut. MS wants the Arcade to remain half the price of the PS3. As for the gangbuster sales of the PS3 that is a fanboys dream. Like any price cut sales will jump, but people act like the other consoles will drop like a rock.

If PS3 price is dropped to $349. X360 Arcade will drop price down to $179.
If PS3 price is dropped to $299. X360 Arcade will drop price down to $149.
Maintaining status quo: X360 Arcade = 50% of PS3 retail price.

I think as long as the PS3 is at a comfortable price to the costumers, it doesnt matter how cheap the Xbox360 will be, the PS3 will sell lots. People wouldnt mind spending more to get what they really want.

I'm going for the 360Slim/remake/whatever this holiday to counter the price drop. I'll probably be only the arcade version and come with an adapter for the HDD. I don't think it'll see to much better, but it really is about timing and Microsoft really hit it on the head with last years price cut.

I think we will see a $199 "pro" console this year and a $149 "arcade", the Elite will remain to be priced the same as the lowest priced SKU (assuming the new bundle boosts sales enough) which everyone knows will likely be $299 at some point later this year.

Precisely.

When you have 127 games rated 80+, one of your competitors has 219, and the other has 320, no number of price drops is going to put you in first place.

Apparently, cutting a console which is $400 to $300 is causing people to think it will increase sales. I have to say that I am one of those people, 360 could come with a happy after the PS3 price cut however fact of the matter is that people would be more likely to bite the bullet and go for a PS3.

Gamecube was $99 and the PS3 is said to be the GC of this generation at $400, by the time the PS3 is that price I will be shocked if it has not done 50 million. The PS3 has so many first party, second party titles as well as multi-plat games, I'm sure there is a game on that console which will cause people to purchase it over the PS3.

Price cut this generation causes a larger spike in sales compared to games, FACT.

 It's really amazing how well the Xbox did considering it was basicly a closed development PC. 

If M$ cuts any price it will be on the Pro model. To my knowledge, they are still losing money on the Arcade. Add to that the extra cost associated with the E74 error (or what ever it is called), I doubt M$ will be in a possition to lower the price of the Arcade.

As I mentioned above, I think they will drop the price of the Pro model or at least offer a special Elite Bundle, but it will be $50 or so. No big $100 price cuts untill sales really start to fall.

if sony goes to 350 and ms 150 sonys in trouble cause its still a 200 price difference if sony goes to 300 and ms goes to 150 then sony will go gangbusters