No, you aren't confused. The guy who started this thread on the other hand...

$99 maybe by the end of the generation.  $59, never.  The cost to produce them will not decrease much below $99, if it reaches that low.

I think next year MS will drop the price at least on the elite models, the arcade maybe, but if only they know they won't be selling too much of the arcade, and most sales stay the elite model(as to not lose a ton of money doing so) I don't think it would push them over sony world wide if sony is still within $50 of the elite, it didn't before.

Sony won't stand idly by, I can see them doing something like bundling big planet and dropping the price to 279.99.

One would assume MS has more room to cut the price, but no one here really knows how much they're losing on each console. I sense that Sony is much closer to matching cost with ms elite models than they ever have been in terms of production costs (although ps3slim does have that hq fan in it). But no one really knows. Microsoft needs a slim model more than a price cut, changing the color of the case won't do all that much for natal. Things been on the market for almost 5 years, it needs a refresh it's starting to look 'old.'

I will be pissed if Microsoft starts introducing a 'contract' model to console gaming, say you pay for 2 years of live then get a console for $99. I wouldn't put it past them to do it though.

^Almost 4 years old, not 5.

As far as the "contract" model, I would actually almost be inclined to purchase a new 360 and sell my old one if that was the case. I know I'm going to be a Gold user so long as they don't jack the price up, so a $99 Elite with a 2 year subscription to Live (at $50 per year) seems like a great deal!

I don't think its gonna drop below $200 anytime soon. I don't know what it costs to make an Arcade 360 but they can't be making that much off it at $200.

I'm hoping to get a Wii, a 360, and a DS for $300.00, then a Slim for $250.00 later on.

The 360 is due for a major main board revision in 2010. CPU and GPU on one chip is one major cost cutting method. A die shrink from 65nm to 45nm is also due. Both of these changes should prove to be a powerful cost saving punch for MS.

CPU and GPU on one chip gives the obvious cascading benefit of reducing or eliminating other parts. One cooling fan is needed instead of two. There may be enough space for the power block to go inside the case, reducing more parts.

So yes, a price cut is due in 2010. MS can afford to knock $50 off the 360 Elite any time they want, although doing this now may make MS take a loss on each console sold.   But when the new hardware revision hit next year, MS should be in the position to drop $50 or higher without taking a loss.  So at worse we should see $250 Elite next year. At best $200.

I think it is definately a possibility. I would of said they would of liked to have seen if the latest update helped sales but as it will be arriving to close to the peak sales period it will happen to late.

I am pretty sure they have a contingency plan for a further price cut and to a large degree it will depend on how the 360 fairs against the PS3 in Europe and NA whether they invoke it.