I don;t think there will be a price cut this year on the arcade or the pro

@matt247 are they? do you have access to Microsoft's books? you think 5 billion loss by the first Xbox, over 1.2 million loss from manufacturing embarrassments, desperate premature price-cuts and heavy money-hatting comes without a toll?

You haven't seen their books either, you've only seen the overall results of Microsofts E+D division and not precisely how Microsoft Game Studios is doing.

 I don't get this logic. How can you ever buy a console then?

Or a game for that matter, or a DVD or a CD or pretty much anything else that reduces in price.

I am going with the Elite becoming a limited production run system that only comes out when there are monster promos happening for a particular game. I would also wager on a game pack including Halo 3, Halo Wars and Halo ODSC (whatever the one due out this year is called) to also come out, very possibly as a bundle deal.

I remember seeing somewhere back that Microsoft was aiming to keep a $50 price advantage in the states on the pro model over PS3 for this gen, so It will most likely depend on what Sony does if they give a price drop. I don't think they'd be very comfortable with the pro at the same price as the base PS3 model (if Sony goes aggressive to $300, which seems to be likely some time this year, but idk).

Pacther said he had statistics that indicate that most people are buying the pro version, so that's the main focus for most consumers; however i do believe the advertised $200 price point may draw consumers in, then when they get to the store they realize they want the pro model. If they're looking at upgrading to a pro model, which most seem to be doing - if Sony's console is near that price they may go with the PS3 instead; especially if they owned a PS2.

Remember they were getting outsold with only a $50 advantage. At $100 they took the lead and still hold it. I could see Microsoft dipping the price further if they get outsold again, but who really knows what a 360 costs, it can't be drastically cheaper than a PS3 to make anymore. If Sony goes to $300, Squilliam's prediction of a 360 price cut would be what would be necessary to avoid being outsold by Sony - I just don't think Microsoft will be willing to go that far into the red.

I still believe arcade is being sold at a loss at this point, so I don't know how much lower they can really go with that they'll probably do a bundle with it. And the more casual you go with customers the less likely MS can recoup losses with marked up peripherals/online fees.

I do think Microsoft will get outsold if they can't find a way to have a $100 advantage on PS3 (360 pro model). By how much is anyones guess at this point. It's going to take Sony a long time to catch up, but I still believe they are in position to do it - they have more room to cut the price than ms.

E3 is going to be interesting with all the rumored eyetoy/wiimote ripoffs and a rumored ps3 price drop, and with these will either of them be able to steal potential wii buyers? And a $300 PS3 will be a possible shakeup to see what the playstation brand can do now that it would actually be kid friendly price.

Matt, Microsoft is not making any profits with xbox 360 YET*, I dont think they could earn the 5.2 billion $ the original xbox ate up. They are still selling their xboxs at a loss, but the loss is not as great as sonys because they have xbox live and software advantage

They were making profits as of 2006.  http://www.xbitlabs.com/news/multimedia/display/20061120132150.html