But that isn't automatically the way these things work.  The standardized price of the Xbox 360 will always be cheaper than the PS3, Microsoft may well have made quicker cost reductions than Sony (and there has been some evidence of this) and on top of that, Microsoft isn't losing billions as a company.

Weren't MS going to ditch the Arcade and place the Pro X360 in at the same price point at some stage?
Or am I dreaming again (more like a nightmare lol)

$100 GBP - 15% VAT = 140 U.S.D. So they would only cut the price that severely if they intended to cut the price of the Arcade in the U.S. to $150 (TBH I think they might)

But really it does depend on what their strategy regarding overall profitability and the PS3 are. Do they want to maximise profit from here on out or do they want to maximise market share and keep Sony weak? It also depends on the term we are talking about? Something which is unprofitable short term may be extremely profitable long term.

Within two years PS3 will be in front of 360 in total worldwide sales. PS3 is selling about the same as 360 in weekly sales in Europe and is double the price of the 360 in Europe. PS3 will be able to overtake the 360 in Europe within 12 months. The gap between PS3 and 360 in Japan will widen and will help eat away at the 360 total sales lead. The US gamers will all buy PS3s when the PS3 price cuts come very soon.

Overall at the moment the 360 is barely outselling the PS3 in weekly worldwide sales by only a mere 10k average per week and is half the price of the PS3. Wait for the PS3 oprice to drop and the sales gap will close dramatically.

When games like GT5, FFXIII, FF Versus XIII, God of War 3, etc come out on the PS3 combined with a price cut PS3 console sales should heavily outsell the Xbox 360 in Europe. Europeans are traditionally huge fans of Gran turismo series and Play station brand. PS3 will outsell the 360 in Europe region will be taken back by Sony and the Japan market will see an avalanche of PS3 outselling the 360 by a wide margin. US sales should all see PS3 outsell the 360 when price cuts at end of 2009 for PS3 comes into effect.

@PS3beats360
That's the spirit!
I admire your enthusiasm

Well, you brought up the chart, I commented on what it showed :)

As to price cuts, a further price cut of the Arcade won't propel its sales nearly as much as a $100 price cut of the PS3. The Arcade is already in the cheap price range, whereas much more people have been on the fence about buying a PS3.

Considering the economic rebound due to happen in 2010, I'll take bets on the PS3 closing the gap in Others by the end of holiday season 2010 if its price is cut between now and holiday season '09.

Not that it will change anything, mind you... 10:9 or 10:10 or 10:11 install base ratio won't affect software development nor retail policies.

Even with a £100 ($150) price cut, the PS3 would still be more expensive than the 360 (apart from the elite). I doubt MS can reduce their hardware costs quicker than Sony for two reasons. Firstly the PS3 is more expensive. The more expensive something is the faster it can reduce costs. Secondly Sony is a hardware company which has decades of experience in reducing costs. MS is first and foremost a software company.