So it's 99.999% certain that Sony is going to do a worldwide (at least USA+PAL regions) price cut. When Sony dropped the price of the 60 GB console in USA, Microsoft didn't move a finger for a long time.

This time, given that it will be a real change to PS3's price structure*, and that it's apparently global in scope, do you think Microsoft will have a different reaction? Will they sit comfortably in their chairs while seeing the game division's bottom line improving for a while until they decide to do their next move? Or will they be more aggressive, putting the heat under Sony's rear during the next few months?

NOTE: this thread is not to discuss whether Microsoft can or not reduce the price. It's obvious for any rational person that if Sony can afford this huge and global price cut, Microsoft can also do the (smaller) cut it may require. If you have doubts about the validity of this claim (or in other words, if you live in a parallel dimension :D), create another thread to express your fears please.

* meaning - the first time there will be a model lower than the lowest price which was previously available.

Well, if the falcon is indeed in the new consoles and they are on a lower cost plane than they were with the previous console, MS may well be in a position to cut the price slightly and still not lose a bunch of money. It appears from the various anecdotal threads that the vast majority of existing stock of Premiums and Cores have been pretty much sold out and the new arcade and falcon versions are beginning to ship... If that is indeed the case, Microsoft may have planned and executed this one beautifully as they will have cleared out the higher cost hardware at a higher price and make room to move down on price on NEW hardware that is at a lower price. Will they cut? I can't believe they wouldn't... The 40 gig PS3 will be $50 cheaper than the elite... Microsoft doesn't have a choice. They HAVE to respond or Sony will close some MAJOR ground fast... Worst case scenario, MS needs to cut the Elite at or below the PS3 or find their lead slip away rather quickly...

I think Sony picked a clever price point scheme at $399 and $499....that WON'T FORCE a price war to occur.

Right now at $399 & $499 vs $279/$349/$449, you have to think Microsoft is pretty comfortable with where things sit for the Holidays. In addition there are a couple pack-in games.

Any moves by microsoft will involve adding extra games/controllers at checkout. Or perhaps something really attractive like free Xbox Live Gold for a year (which won't cost them too much, but would definitely move some console).

So....I don't really see any pricing moves by Microsoft until next spring or summer where I personally think Microsoft will phase out the Arcade Xbox, drop the Premium to $299 and Elite to $399..... they want to profit off the Xbox.

To slightly revise things, I could maybe see the Elite getting cut to $399, but I still think the other versions will hold fast.

Although if for some crazy reason Microsoft does cut I imagine something like,
$249 Arcade Pack, $299 Premium, $399 Elite.

i would guess after christmas for Msoft, and possibly some sort of price reduction or price restructure(possibly adding Wii fit to the $250 set up) for the Wii early next fiscal...hoping it isn't still sold out by then of course, else Nintendo might take the crown from Msoft for longest time a console has been on the market without a price drop.

Personally I don't think the HD-less 360 will go away at all. No HD is the key to reach a very low price later in the console cycle. ($100-150) I know many like to point out, as frequently as they can, how useless a 360 is without a HD, but please take a millisecond and consider PS1, PS2 and Wii sales first. They're all without HD and somehow they've sold well!

Like I mentioned in another thread, 360s seems to be going out of stock. I'm guessing this is something more than a simple CPU replacement. I think they are waiting for Sony to make their move, then they will come out with their new models for significantly cheaper.

I think MS will stick with the current pricing.

As mentioned above, the price lineup Sony is choosing doesn't force MS into a corner, that combined with MS having a much better holiday lineup (IMHO) means that they can still be very competitive with their 3-tier sku.

Plus, when MS does their next round of discounts, I think that would force Nintendo to as well. My prediction on this is not until next summer will we see all three hit a round of price reductions.

I didn't want to give my opinion in the opening post so that I wouldn't affect people's thinking.

I think Microsoft will (and should) try sticking with the current prices until 2008, unless Sony's price cut gives the PS3 a scary momentum... It would make them look much more confident, and their partners would surely appreciate it if MS could beat Sony without a price cut.

But you may have a point there, FishyJoe...