They didn't wait a year, they waited 6 months in Europe and then for the end of the year they timed their response perfectly and they took back everything Sony took during the year and then added some more. Their response to the price cut was perfect and it will probably lead to a 4M unit swing by the time Sony can respond. I predicted their response at the time based off statements they made that they would finish 2nd in the generation. These statements still apply.

Microsoft does not have 9B to go, you're basing it off some stupid inflation adjusted table which is based off their entire EDD results and has pretty close to zero bearing on the actual Xbox 360 operations and reality. Look beneath the results and you can see there is actually a fairly good margin between costs directly attributed to the Xbox 360 and revenue gathered by that platform. The EDD isn't carrying the Xbox 360, the Xbox 360 is carrying the EDD. Furthermore the losses are sunk costs and they don't effect the operations going forward so long as the operations are profitable.

What incentive does Microsoft have for increasing sales now? They have 3 quite big incentives. The first is their revenue model is better than Sony's so they can earn revenue off the online services in Xbox Live so they can afford a bigger loss per unit initially because they can earn more revenue per Xbox 360 per year. The second is that they want to have a bigger userbase to speed adoption of Natal to earn more future revenue and it also gives them better negotiating positions with third party companies. The third is the console war games bleed on between generations, a stronger result now yields a stronger result for the next time they play the game. How they come out of the gate next time is reflected on how many units they sell this time.

Can they afford to cut the price? Well probably. The Xbox 360 has been on the market for a year longer than the PS3 and it hasn't had as drastic price cuts as the competition. Also their revenues are improving whilst for Sony their PSP and PS2 sales are down year over year. Also even if they make no internal hardware changes to the Xbox 360, a console produced now will be cheaper than it was last year due to improved yields on the chips and lower prices per wafer, better manufacturing, more reliable consoles and lower prices on pretty much everything due to the recession. How much cheaper? I don't know but its definately cheaper. Add any other changes they care to make into the mix such as 45nm CPU/GPUs, obsorbing the ED-Ram into the GPU, using 4 ram chips vs 8 or switching to faster/cheaper GDDR5 its all open to them and they would all cut the per unit price of the Xbox 360.

I was trying to avoid a pissing contest but I see it's impossible. If you think the 360 will begetting a pricedrop two years in a row I have no reason to doubt you.

I find it interesting that few of the PS3 backers ever mention the Blu-Ray capabilities anymore in comparisons. I remember when HD-DVD was alive how it was a HUGE issue for them, but now apparently it's not a big deal, because both formats have failed I suppose. First HD-DVD fell, then UMD, and soon BR?

Anyhow, my point is, that there are fewer and fewer high points to hold up and the reasoning as to why the PS3 is 'justifiably' priced at $400. As you take away all the fluff, it comes down to the two HD system being VERY comparable in processing power, and the X360 having the price advantage and ease-of-development advantage.

since when is BD failing?

No its slowly getting bigger a 10 million gap soon.

$299.99 XBox 360 Slim Redesign with Natal + Natal Sports rip off next year.

Book it.

i agree with you but i also think 360 sales might really pick up this holiday season the PS3 will only do the same with a good price drop. No price drop for the PS3 will result in it being outsold by a wide margin

Unless the PS3 is doing a price drop we can expect 360 to dominate the PS3 another holiday season. Infamous didn't seem to do much in regards to moving hardware and that was a big release for them.

I think PS3 will do better this year partly because of the price drop thats coming for it and because there are SO MANY people that want a PS3 but can't afford one and the economy last fall had a MAJOR factor into that decision to buy one or not. They probably went with something else because of price.

Now, with the economy do a little bit better at the moment then a couple months ago and signs pointing more up than down, there's probably going to be a VERY large PS3 purchase this holiday. Sony knows that, and they have the gamelineup to support it 120%.

Ratchet & Clank Future 2
MAG
Uncharted 2
And all of the other games that arent exclusive to PS3, but are available (MW2, Bioshock 2, etc.)

Plus. Sony's Spring looks VERY strong with the release of God of War 3, Gran Turismo 5, Heavy Rain, Final Fantasy XIV, Modnation Racers just to name the EXCLUSIVES

MAG is retarded and Ratchet & Clank while extremely fun are not going to budge system numbers... God of War isn't going to do much either it's a Sony franchise and it will sell mostly to those who already own the system... GT5 will bring some PS2 hold overs for sure and FF14 is a joke at best... Square better be on their A game if they want that game to not choke and die when Old Republic gets released(not to mention it'll find it's way to the 360 without a doubt... you don't start your talks about an MMO on how to limit your customer base).  The only think that can help Sony is if they drop the price 100 bucks around Sept. or Oct. though I think 50 dollars would be better for them financially.  I don't think Microsoft would respond to a 50 dollar price drop and they would see a nice bump in numbers.