Sony cuts Playstation 3 prices, will Microsoft follow suit?

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One of the worst kept secrets (and absolutely lamest denials) is officially out now, with word that Sony is officially announcing a $100 price cut on their Playstation 3 console.  For details, see: Sony Cuts PlayStation 3 Price, Aims to Double Sales (from Bloomberg, among others)

Now the question is will Microsoft follow suit in this battle of the titans and cut the pricing on their Xbox 360 consoles?   In addition, will they cut the prices on their HD-DVD add-on attachment to also help match Sony's prices for a next generation console and next generation video disc experience?

Microsoft opted to keep the HD-DVD as an add-on device when they developed the Elite version of their Xbox 360 systems, though they did opt to include an HDMI port in the system.  Supposedly Microsoft's reasoning was that even at $479 for the console, adding on the approximately $199 HD-DVD add-on still meant a very competitive price to Sony's Blu-ray included Playstation 3 console.

As things stand now, Microsoft is sitting at a price point at least $100 over Sony for an equivalent system (more like $180 over Sony at this point), and in the very hotly contested console gaming market pricing is just about everything.

Microsoft seems to nearly be throwing in the towel on the HD-DVD front, but I don't see them not dropping their pricing for the Xbox 360 very quickly in response to Sony's move here.  They have a lead at this point, and I doubt they really want to relinquish that lead at this time.  While they can argue that they have more 'must have' games, and more killer ap content, that won't last long given Sony's efforts to pump up the volume in their content availability.

As I noted earlier in the article here: Thank the higher power(s) for competition in console gaming everyone should be glad that there's competition in this market, as it means great things for consumers.