I believe that MS decided to strike back at Sony in the battle between the PS3 and the 360 by not striking back. 

Sony and MS have both released thier last quarter results and the division with the 360 for MS made some $300 million and because it is safe to assume that other products in that division are still in the investment stage the 360 was even more profitable.  While Sony Network division lost $654 million.  The division is made up of Vaio computers, Walkman type devices, PS2 and PSP as well as the PS3.  The PS3 is the clear product in that division that is causing the losses.  PS2 and PSP profits sheild greater losses than the $654 million.

I have been puzzled why MS didnt really cut the price of the 360 and rather just added 60GB of HDD space to the HDD based model (was the pro and now the elite) while pulling out accessories that can be sold for a tidy profit.  They didnt cut the Arcade price and pulled out any bundled games.

So it appears to me that MS has decided to enjoy the profits of the 360.  At this point it doesnt matter if the PS3 catches up a few million between September 2009 and September 2010.  MS knows that they have 3rd party development support locked in for the remainder of this generation.  So MS is going to take the profits and invest them in Natal and other 360 related efforts (new IP development, etc.). MS knows that they can make a big splash with Natal release if the price is very attractive.  So the profits this next year will be used partially for Natal release.

^Makes sense, just hope your right.....

Just puttng things in perspective, I think the release of Halo 3 ODST probably accounted for a fair chunk of the MS profits but either way being profitable is a good thing. MS has been in this industry now for a number of years and the board members are going to want to see profits to justify the ongoing and continued push of the MS console business.

As long as they're investing it in games, I'm happy :)

If MS shipped 2 million copies of ODST that accounts for at most $100M in revenue. Not profit, just revenue.  Since the profit itself for the division was over $300M with multiple products that we know are losing money (Zune, MS Mobile Platform, etc.) then safe to say 360 profits doing nicely.

Well Ms is doing what there supposed to do, make money. So Ms strategy makes money.

Good point, MS needs to satisfy the shareholders and board members before they can continue investing in this industry.

Could be, plus 2010 is looking way better for (console) exclusives in my opinion.

well did strike back, it just not worked.

they cut the price of the elite by 100$

that they did failed to do was redesign the console

or unless u don't call ps3 slim a price cut, just adding 40gb, and making it smaller.

What does the 360 strategy have to do with anything the PS3 is doing?  If you aren't commenting on the OP your not contributing to the thread, and thats not needed.  Go make a ps3 thread if you want to discuss that.....

I would imagine Microsoft will have a temporary price cut on the arcade for a month or so around Black Friday.   This will enable them to retain a higher price after the holidays and also keep the Arcade at a budget price when its needed most.  Other than that I think your right about Microsoft wanting to keep their profits up.  And its a good plan for their gaming division.