Well, reasonable its more about an overall balance. There are pros and cons for cutting, or not cutting the price. Given their reactions thus far and their positioning with the Arcade becoming as expensive as the Premium and the Premium being discontinued to make way for the Elite in the U.K, if they are showing concern they are really going about it the wrong way.

So yes, they will pay attention to what the competition are doing but I think unless something unexpected happens (they would have run the expected numbers) they will probably play their own game for the next year and everything which happens will probably fall within their acceptable range.

Remember the price elasticity of Demand for the PS3 first price cut had revenue steady for Sony relative to the same point 6 months before and after the price cut. So with a 25% cut we're realisticly looking at a probable 20% increase in sales YOY, if it hits 30% I will be surprised. Hopefully thats some perspective.

Microsoft DWARFS sony financially as well as brand power.  Microsoft is consistently at the top of best of brand lists.

I really don't know why anyone even replies to FKNetwork, all his comments are the same, he loves 360 and hates ps3, theres only so many times he can repeat it before it gets rather boring and everything he says makes him look even more silly than before lol

Fixed.

On topic, the hundreds of vg MS fanboys should get ready to go on vacation. After Cologne announcements, this kind of threads will hurt them a lot. Especially after the first 'low priced PS3' sales numbers. And even more after GT5 release.

Maybe they should. A £200 Slim will kick the 360's ass now the Arcade isn't really, really cheap anymore.

More employees = Sony

More Assets = Sony

More products = Sony

Higher Share price = Sony

More money basically = Microsoft

And whoever said MS dwarfs Sony in terms of brand power is smoking something. Windows has a huge brand name, not MS.

The reason why the Elite is getting a price drop is due somewhat to the PS3 slim.

Why make the Elite the highest price of the 2 (Elite vs Trey)and when it is worth less value that dosent help. Then sales will drop.

@Glover : You could add 'better brand recognition' and 'more inovation' too...

The only thing that MS still has over Sony is money. And that's only because of their 2 old cash cows, Windows and Office.

The problem is those cash cows are slowly dying : revenue drops fast, many PC are now sold with Linux, people use OpenOffice in many corporations.

Since everything else failed (Xbox 1 fiasco, Vista, Zune, yahoo bid failure, RROD fiasco...), they're in trouble.

MS is clearly heading south now. Most financial experts are selling MS share...

@Garnett : Of course the 360 price cut is due to the incoming PS3 price cut. The problem is it won't change things that much for MS since the 360 is already dirt cheap.

Microsoft knows they can't price 360 on an equal footing with PS3. Not during this gen. The PS brand is too strong. X360 will be always  cheaper alternative. Without price advantage they would go nowhere.

@kber81 : and even with price advantage I suspect they'll go nowhere now that the PS3 will be 299$ from tomorrow on...

With the PS3 price cut, the situation will likely reverse to what it was before last september MS price cut, with the PS3 crushing the 360 in worldwide sales every week.

The 360 has too few good exclusives (zero AAA exclusive full games on 360 since last november), too few studios, too few features, no free online gaming...

If the PS3 is cheap, you basically have no reason to choose the 360 over the PS3. On PS3 you have every multiplatform games, plus tons of AAA Sony exclusives, plus free online gaming...

ps3 is hot shit right now 360 is cold