Here's another one of Michael Pachter's predictions. Last week he predicted the subscription cost for Xbox Live would increase to $10 a month soon. Now he's saying the price of the Xbox 360 will be cut in 2010. In November, the PS3 saw an 85% year-over-year sales increase while the Wii and Xbox 360 saw sales decreases. This is the reason Pachter and his Wedbush associates drew the conclusion, which said, "We think that the PS3 will again outsell the Xbox 360 in November and December, prompting a price cut some time early next year."

Microsoft "has the ability to lower price yet again," but it probably won't until "it begins to lose significant market share to Sony," added Pachter.

http://www.bravenewgamer.com/2009/12/pachter-xbox-360-price-cut-in-2010/

So, the 360 just cut its price a few months ago, and it looks like we will get a 2010 1Q cut as well for the 360.

This is kind of sloppy for MS, as the usual thing to do is to have rarer price cuts that are larger, so as not to train the consumer to hold off and expect a price cut anytime soon. Anyway, I agree that the 360 has plenty of potential to cut its price, the thing of it is though, is that the slim really helped Sony by allowing it to make its console for cheaper, which MS hasn't been able to do yet. So, Sony will continue to squeeze the 360 somewhat as they'll have more money at their disposal than the early part of 2009.

I expect a small price cut either way, perhaps $40-$50, but this should allow the 360 to catch up in sales with the PS3, for the short term, will be less effective over the long term as sony will continue to squeeze MS.

Pachter is the last person you want to look to, if anyone listen to the man who pointed out the Summer 08 price cuts and the RE5 bundle and the PS3 Slim.

Pachter has some great industry connections, and could really care less about bundles, that's just a marketing thing. He can get the CEO of MS, Sony, Ninty in about 5 seconds and these CEO's will just about give sex favors for him because Pachter will influence the industry positively or negatively.

Other analysts have much less influence.

You might be right, but keep in mind that MS can afford to be pretty aggressive, because they have the money to back themselves up.  Sony can't be a blowhard kind of company, if anything they have to be a lot more conservative about things.

Nobody needs a statement from an analyst to know that 360 is going to have a price cut next year. PS3 will continue to outsell 360, so MS will have to come with a price drop.