$299 PS3 is superior to the arcade.

If it happened before the holidays, orders for $299 elites and the MW2 bundle would dry up and Arcades would be purchased instead, along with (often secondhand) 360 hard drives.

It would drive Arcade sales, though. 

As was stated earlier in the thread the arcade recently got a price hike in the UK. That leads me to assume that MS is still losing money on that SKU so a price cut for it is definitely not in the cards.

The problem is if they cut the price now to 149$ what can they do when Natal releases?
Cutting the price would mean that the console would be the same price as Natal.Dont know if that would be any good.
Things they COULD do then, are
-relealese a slim
-bundle with Natal

First off Xbox 360 would definatly crush the PS3 in America this holiday season of this happened. We all know its true America = Land of the Xbox (as far as HD consoles are concerned) and in Japan nothing is going to really help the 360 we all know its in 3rd place there and that isnt going to change.

Now IMHO i think a $50 would really help counter SONY in europe and would keep the 360 fairly close behind the PS3. but ultimatly the PS3 would win in Europe. Thus i think sales would be very even WW this holiday season.

If their was a 249.99 360, and they bundle it with Alan Wake, I'm going to get one.

@KylieDog

didn't the WIi price go up in the UK & then down?

A $150 Arcade would be awesome if you want to replace your dead 360 (could also be used as a cheap backup 360 if yours isnt dead yet. lol) and don't want your old hard drive, cables, headset, etc. to go to waste. And plus you get an extra wireless controller out of it!

Not that I wouldn't take another price cut, but I'm not entirely sure it will even be needed. 360 is starting to overtake PS3 in NA again, but obviously WW figures are not where MS wants them to be. I could see more of an effort placed into advertising in those regions or promoting games that are more in their style (ie: racing, soccer, platformers). With games like Alan Wake, Mass Effect 2, COD MW2, Bioshock 2, Assissin's Creed 2, Forza MS 3, Left 4 Dead 2, and Dragon Age all slated for release within the next 6 months or so, I see at least 8 games that will sell over 500,000 copies within the first week (probably 6 of those 500k wk 1 in NA alone). I simply do not see this kind of software being moved by PS3 over the next 6 months, so I doubt that anyone over at MS is nervous for the upcoming season. Wii obviously sells anything and everything, so yeah, who gets 1st is kinda obvious heh.

Microsoft should just leave the pricing alone. Its a safe bet that Sony is losing money for each console. Microsoft on the other hand may actually be generating money for each console.

It would be best to just bundle games with every 360. I'm sure that's more profitable for MS as opposed to dropping the console price.