... continued from the article above. Thanks for continuing here. 
Unfortunately by the time you add that $50 into the cost of the console you buy, you're looking at a closer gap than Microsoft should be working with when you compare the Xbox 360 console to the PS3. The PS3 offers a built-in next generation video disc format technology: Blu-ray disc. A format the Microsoft doesn't currently support. Microsoft choose to support HD-DVD but then they have not yet built a console that includes that technology in the actual console. Instead, you must purchase the HD-DVD separately, adding another $180 (give or take) to the cost of the system.
When all is said and done, Microsoft has no real pricing advantage over Sony, especially with the temporary pricing cuts that Sony effectively went with here.
So, it is time for Microsoft to do something about that problem. They need to cut the prices on their consoles by a noticable amount. A $50 cut would be an approximately 12 - 15% price cut on the boxes. That's what I call a noticable amount. It would probably cost Microsoft money, but they reportedly already lose money on every console they sell. Why not take an additional loss so they can continue to pull in customers and keep them from going to Sony, or perhaps from going to Nintendo to buy a Wii.
Reportedly Microsoft and Best Buy have a sale coming up that will see Xbox 360 consoles sold with one year of Xbox Live access included in the bundle at no extra charge. That is a good start, and yes, I know that is supposedly a $50 value, but I don't think that is really enough of a bottom line cut in the price of the box. Cut an additional $25 - $50 off the bottom line price of the box and watch a bunch of fence sitters suddenly get more interested in purchasing an Xbox 360. Get those older Xbox systems retired and replaced with the newer systems, where you can sell those customers the newer software and start making back that much more money.
I know that Halo 3 is coming out this fall and that when it does cash registers in many toy and gaming stores (as well as at Wal*Mart, Target, K-Mart, etc.) are going to go nuts. Many teens are going to be spending their allowances, or demanding that Daddy or Mommy spend money on them to buy an Xbox 360 so they can play Halo 3 against their friends (and enemies, hehehe). With Sony lacking any must have titles at this point, and without a Halo 3 type title on the horizon for them, perhaps Microsoft doesn't feel the need to lay some body blows on their competitor, but personally, I think it's time.
Microsoft should blast Sony now while they can, and keep the pressure up on them for as long as possible. Don't let Sony's price drop scam catch any momentum at all. Microsoft can put Sony well behind in this generations console wars if they want to. The question is just how badly do they want to?