This is great for microsoft, however this will not do anything to hinter the sales of the PS3.
This is the same price as the original XBOX 360 pro. The price point is what matters. This has been proven for the last 2 years that stats don't make the difference. If that was the case the PS3 80gb would of outsold the 360 pro by a long shot, considering it is a vastly superior deal as a console alone.
What this means is that microsoft have simply changed the arrangement of Skus, this is not a price drop for an entry 360. I highly doubt there have been legions of people sitting at home saying I want a 360, but i wont get the pro I need a 120gb hd, I'll just wait for the elite to drop down to 299.
This is the only move microsoft could of made... but it wont be enough... I just think that them being side by side means that the PS3 looks so much better as a purchase.
As time goes on, the ps3 will be a more and more attractive purchase. as HD tvs become adopted more in the household, Blu-ray will become the household standard. People ARE going to get HD tvs. they will go down in price. They WILL become the standard. As more adopt, blu-ray will become more and more attractive.
As video quality goes up, the use of BRD will become more and more adopted, and whether one likes it or not, the DVD is going out. Maybe not next year, but soon enough, dvds will not be used as a media for anything digital anymore. When our TVs go beyond 1080P, you'll need the 100gb BRD, or the 200gb BRD. The thing about the Blu-ray disc is that its just getting started, and unlike the DVD or the VHS or the CD, the Blu-ray disc is very easily expanded in size, meaning that it is going to be around for a long time.
Lets put this into perspective. Blu-ray will be the industry standard until hard media is no more.