Yeah, and most have agreed that the PS3 has caught up in terms of existing library

not wrong at all, just subjective

I dont know what ms will do...

Personly id hold my ground! The 360 is heaps better and still on a role! Yes ps3 has a blue ray drive but its made little to no difference so far!

Ms have a huge lead, id test the water see if the ps3 really does take off with the price drop!

Any changes they do should be made only to the Elite. If they add a hdd to the arcade it will drive up the price. They spent soo much time last yr advertising that 199.99 price point. It was everywhere, at the end of every tv ad, contests, you name it.

If they add more to the arcade and drive it's price up, it will create consumer confusion. Everyone now knows there $199.99. It would be wrong to change that a yr later. Leave that sku alone MS.

       Yeah, the inclusion of a blu-ray drive in PS3 has nothing on the inclusion of rrod in almost all 360's.  And having FFXIII (exclusive in Japan), Versus XIII (exclusive worldwide) , GT5 (it will outsell Forza 3 in Japan 10 to 1), and PS3's gaining total domination of the hd wars with Japanese developers, not to mention the added success that will roll PS3's way to due to the PSP finally beginning to catch on worldwide casts a much better future for the 360 than it has ever had before.

Traditionally MS usually waits to see what effect Sony's move has had, then reacts.

That being said, the whole wifi dongle is now becoming an issue. With the ps3 at 299$, if you need wifi to feed internet to your 360 it puts every 360 sku above the ps3's price level.

Come on, you can't picture anyone buying a $250 elite over a $299 PS3?  If that were remotely true then no one would ever have bought an elite at $399 which was the same price as the PS3. 

MS goes for Sony's throat and puts Xbox 360 Arcade unit at the $129 sweet spot that the PS2 maintained for so long. The elite goes to $249. Holiday Bundle to be announced in the future.

360 is just going to get outsold for a year, just like Sony did last year and MS the year before that and Sony the year before that.

However as far as games go that is an advantage that MS hasn't had for a while now.

Microsoft is ina tough spot now. It had to happen eventually though. The PS3 is going to start selling out from now until next year in my opinion. The introduction of a slim is one selling point, but it will be $100 cheaper. Big Big price cut move by Sony. If Sony had decided to release GT5 this holiday and bundled- it would absolutely sell out until next year.

I am giddy with excitement, for seeing the sales change.

With that being said, I think Microsoft needs to add a hard drive to the arcade and maintain the $200 price point. There are enough smart people out there that will notice if the $200 360 has a hard drive, and is essentially the old pro.

Without this, The game belongs to Sony imo. An Elite for $300 really just forces a comparison with the PS3, (one which the PS3 absolutely wins on). It is Microsoft just going with the motion really.

Another option would be to reduce the price of the Elite to $250, but now might not be the right time for that considering an announcement like that pales in comparison to a $300 slim PS3 bluray machine, free online, wifi included.

competition is great!