i hope sony crush them, if the slim it's real and so is GT5 release date microsoft lead will start to get smaller.

I don't know wats going on on MS mind that they think Elite replacing the Pro will be the answer to ps3 slim+price cut....

Given the PS3 has managed to stay competitive with the 360 in terms of overall sales. this has happened in a recession, and a network that needed years to catch Live, and lack of must-have software. We've had price drops in the past, but this is different; the exclusives are here (and more are coming), the network is arguably caught up to Live, and with Blu-Ray becoming more and more of a household name, the path is clear guys.

Microsoft shouldn't be worried about the price cut since their doing one them selves and it looks like they may end up costing the same $299.

What Microsoft should be worried about is the PS3 slim redesign, it'll refresh the PS3 image giving the impression to those not in the know that it's even better, something Microsoft has nothing to compete with, not only that but it's made worse by the value proposition since at the same price the PS3 offers built in wifi, and can play Blu-ray movies, neither of which the 360 offer. This is what they should and probably are scared off but of course they wouldn't admit to it.

It's interesting though that Microsoft didn't lower the elite to at least $250, because that could negate the value the PS3 brings when priced the same...but it could be the situation where Microsoft simply didn't want to take a profit hit and are most likely selling the 360 at a possible cost to cost price once it drops down to $299. I don't mention the arcade, since those don't sell as well as the pro or elite, and since the pro is being phased out, that only leave 2 SKUs, with the elite being the one the majority of people will buy.

Also, If Microsoft did drop the Elite to $250, wouldn't they also compete directly with the wii, so at that stage they will be negating the PS3 value while at the same time being more value it's self when priced the same as the wii, in essence killing 2 birds with one stone.

If Microsoft did what I suggested, instead of what the rumour says they'll do, then they cold have also phased out the arcade, and just gone the 1 SKU route, as well as causing a little hurt to it's competition.

Um, in reality they are losing the high end SKU and not the mid range SKU. Its a convenience issue, and nothing more. Its simply easier for them to drop the Premium and reconfigure than it is to drop the Elite as they are always going to be trending towards larger HDDs anyway. There are rumours of even larger HDDs being offered for people who need more than 120GB.

What they do depends on their goals. I see no room for concern here, they will do whatever action they deem to suit their interests best. They don't have any reason to worry about Sony running away with anything because their 8M console lead gives them room to sit for a year and focus on profitability if they so wish. Sony has far more reason to worry about what Microsoft does than vice versa as the latter really does have the resources to cut the price significantly and the profitability to match, especially considering Microsofts strong Live revenue.

It depends how define "smaller" company. Profit-wise and by terms of stock-value MS is much bigger but Sony has much bigger revenue and assets. And Sony also has a lot more employees (MS has 90k employees while Sony has 180k).

LMAO, sony can't fight their way out of a paper bag at the moment.....

And yeah, this is a superb move by Microsoft, this will really muck Sony up again as it will be like a ps3 price cut didn't even happen as the 360 will still be much much cheaper lol, this is competition at its best and something which Microsoft is rather good at!

If the elite does drop to £169.99 I will buy one the first day as I need a larger hard drive and would like a jasper model too.

MS isn't reconfiguring anything but their pricing. That is a direct response to a perceived consumer reaction of a direct competitor releasing a new model at a lower price. It's in their best interests to do this rather than do nothing at all, which is precisely what they would do if they weren't concerned.

If they drop the "Elite" from the SKU you can make a paper argument that the top end SKU is gone, but the reality is the HDMI cable would be the only thing missing.

If you want to throw out predictions of MS sticking with a three tier console structure and a 250GB, 320GB Elite or higher you would have a leg to stand on, but until that happens, the reality is: mid-range SKU is gone, high-end SKU is down $100.

If MS wasn't worried, they wouldn't need to say they're not worried.

I can understand why they're afraid though. A combination of PS3 price cut, PS3 slim and GT5 2009 release would instantly kill any momentum the 360 had, pushing back the 360 to the place where it belongs, the last place I mean.

Cutting the 360 price again won't change anything this time since the 360 is already very affordable. Anybody who wanted a 360 already has one... MS should keep the money to make good exclusives, that's what the 360 owners desperately need this year.

Waouw your view is very optimistic for the PS3 and very pessimistic for the 360.... and not very realistic...

360 is still more than 8 millions ahead and had a significant grow over the years... while the PS3 is selling less and less over year...

I don't expect any revolution here...

Desperatly need of exclusivities ? Have you seen the pre-order figures for ODST ? Sony annouced tons of exclusivities at E3 then pushed back everything for 2010 (the usual...). Even with less exclusivities on the 360, it still sells better.. so...

IMO the strategy of MS is way better calibrated than the Sony one...