Xbox Price Drop?

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Meanwhile, Microsoft's (NASDAQ: MSFT) Xbox 360, which was priced in the middle of the Wii's ($250) and the PlayStation 3's ($500 and up) price points has sold very well during the same six-month time period, trailing the Wii but ahead of the PlayStation 3. Adding fuel to this fire, Microsoft has announced that it will drop the price of the "core" xbox 360 gaming package to only $199 -- a drop from the previous $299. Was this price drop in Microsoft's business plan? Probably so -- but the company may have had to accelerate the drop based on how well the Wii is performing in sales compared to all the competition.

[This xbox 360 price cut has not been officially confirmed as of 6-12-07. More information to follow as it develops.]
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David Hufford (a director of Xbox product management) is trying to do some damage control on this rumor. He reported to Kotaku on 6/8/07:

The comment, which is accurately reported, unfortunately has now been taken way out of context and being reported as if I am signaling a price drop. I was not, I am not.
With Xbox 360s selling well at their current price point, Elites selling out at $479, and an insanely great portfolio of games in the market, there's no reason to announce any kind of price drop anytime soon.

The comment he made earlier that day that started this whole rumor was:

We are well aware that the sweet spot of the market is really 199 bucks...
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