^There's only one problem. MS has had a $200 version of the 360 out for a year. If what your saying is true, PS3 should still be under the 360 every week, except maybe the first week of the Slim release. However, I think people see the value in the PS3, especially now that it's $300.

Also, let's not forget that the promotion was by Wal-mart, not MS. Now people say MS has endless pockets, but I doubt they want to keep selling the 360 at a loss. Especially since they just started making a profit recently, and have to recoup the few billion they lost at the beginning of this gen. And with PS3 dropping in the cost to produce it, who knows if Sony wouldn't drop the price by $50, and still break even, to respond to any kind of price cut MS puts in place.

^The arcade is the less desired version of the 360, but even arcade can sell at $99, as we saw, the elite also needs to come down in price as well.

Actually they've been in the black on the 360 for a little bit now, also PS3 is still sold at a loss, unlike the 360, so MS can drop, Sony will lose even more money if they drop, and between the two, MS can absorb it much easier, in fact I wouldn't be surprised if MS did price cut a lot and caused Sony to bleed money, as MS can afford it, Sony on the other hand is in financial difficulty and losing too much money could lead them to disaster.

True xbox arcade is still less expensive than PS3, theres also games that comes with it. Its 1 of many good example that theres a lot of factors other than price. Just to name a few on the top of my head: quality, media, publicity, games, brand loyalty, features, HDTV home cinema in rising, positive mouth to mouth VS negative mouth to mouth. The latter is something very important that is switching over. PS3 has been crippled by negative comment from xbox user, media and peoples following the trend of bashing the product since the release, but the situation is reversing right now.

sony does not need to drop it's prices uless it starts selling low again, with it selling over 200k per week, then there really is no justification for a price drop, i think sony will basically wait until they can afford to drop the price again (like they did last time, you see they did not rush into any price cuts it was all planned), unless something really goes wrong with their business plan which i cannot see happening this year (or next year)
The ps3 has too many good software titles that people want for it this year, this is going to mean more ps3 sales, not less, what must have titles does the xbox have coming, i can only think of a few halo reach and alan wake, maybe mass effect 2 (but that may go multiplatform)
Again try and look at this from a different point of view.

Price cutting their console will not raise sale enough to justify it so they will prolly not do it. If they do, sony will not have to price cut to keep selling like they do, so they will not bleed money. Maybe in your dreams but not in real life :P.

Are your sure about that, lol, what we saw is that reducing the price did raise sales, and quite a lot, and that was only a limited reduction, a permanent cut WW would raise sales much more.

As for Sony, its only assumes that the 360 price cut would not cut into its sales, likelihood is that it would, see as the game titles got released this year, most would be shared across the two consoles, the lower price od the 360 would drive more sales to the 360 and away from the PS3 and over time, any momentum from the slim would die down, eventually the PS3 would be back down, while the 360 absorbed the sales.

You're speaking as if the cut would happen in today's environment, though. If MS did cut, it would most likely come in Sept. or Nov. of next year. A lot can change in that time. For instance, if Sony can get production cost for the PS3 down to around $250, I doubt they would mind breaking even on PS3 sales to keep above the 360. As of now they are only selling at a slight loss, 10% loss actually. Which I think means it cost about $330 to make the PS3. I can totally see them being able to get production costs down by $80 in a year. This would definitely offset any price cut MS would do, even if it was a $100 cut. Though I would guess MS would only drop it by $50, so they can still make a good amount of profit off of it.

And yes, the 360 has been selling at a profit now, but on whole, the gaming division is still in the red. It was only for fiscal year 2008 that they began seeing a profit, a profit of 426 million. Now compare to the period of 2001-2007, were they lost 7.2 billion. So yea, they have some making up to do. And that's not to rag on MS, either. Because the PS3 has cost Sony something like 4 billion. Though they do believe they'll be making a profit in 2010.

Basically, things can change. But, I personally can't see anything MS doing to destroy PS3 sales.

No, I'm expecting it spring of next year, right before the Wand release, and then another in the fall possibly with NATAL, actually a stealth cut, bundling NATAL at the same price.

And yeah I could see that really stopping PS3 sales.

Thing is, even if MS does go back in the red, they are probably looking long term, at how they can marginalize Sony and improve their marketshare not just this gen, but going forward as well

Avinash_Tyagi if you owned a xbox 360 and a PS3 you would notice the difference in the quality of the consoles, the xbox 360 is a nice console, it just has one too many issues for my liking which is why i got rid of the original one i bought i got fed up of rrod and disk scratching.
Ever since i bought my ps3 (release console) I have had not one single problem with it, so already i know which is the better console.
Alot of people will do research and find out these facts, no matter what price you sell the xbox 360 at, it still has too many problems and is just an unecessary pain, even if m$ does replace it, so eventually they will get fed up and get a PS3 or a Wii

I'm starting to sense a dislike of Sony from Avinash. Though I've seen it before. Even though he says he's unbiased, sure as heck seems he wants MS to stay in 2nd.

You have to remember Avinash, PS3 was built for longevity and quality. And people are seeing that, hence the demand. You say Blu-ray won't help it, but it already has. The majority of Blu-ray players in peoples homes are PS3's. And with sales of Blu-ray climbing still, people will want a player. But they might also want a "next" gen system. They might want to play games online, but don't want to pay for online or WiFi. So most likely they'd get the all-in-one solution. It only does everything. LOL. Well, at least my 60 (500) GB system still does everything. Even Linux.