In a bold move, Microsoft has decided to cut the price of its Xbox 360 not only in Japan, but also in the United States. Starting this Friday the price of Xbox 360 Arcade will go under Wii’s $250, as the console will have a $199 price tag.  

As you might already know, the other two versions of Xbox 360, Pro and Elite, will be also “affected”.

The Pro version which features a 60 GB hard drive will be priced at $299, while the Elite will have a $399 price tag.

While is obvious why Microsoft has made this move, now the big question is if Nintendo and Sony will try to match the new $199 price.

Apparently, they won’t! Speaking for Gamasutra, Lazard Capital Markets analyst Colin Sebastian noted that Nintendo is still working to solve the supply problems, while Sony officials have repeatedly dismiss any rumors about the price cut.
Since the beginning of the year, Microsoft’s Xbox 360 registered poor sales in the United States, being almost constantly outsold its rivals, PS3 and Nintendo Wii.

That’s maybe the reason why Sony officials said won’t consider a price cut for PS3, at least for this year. PlayStation 3 was released in November 2006 in Japan and US and the gaming console is being currently sold for $400 in US.

Instead, Sony wishes to make its console more profitable. In a report released in June, Forbes said that Play Station 3 has cost Sony an incredible $3 billion, mainly because of the company’s pricing strategy for the product.

As PS3 hit the market, Sony wanted to recover some of the market share that Microsoft’s Xbox 360 had gained, mainly due to its
launch a year before PS3’s.

Sony thought that by selling its consoles at a price that would be a little less that their actual cost, it might gain more market share and it would be able to use it to make profit for the company from exclusive gaming titles and sales of its patented Blu-Ray. However, Sony has managed to win the Blu-ray versus HD DVD battle due to its PS3.

What is more, after enough units would have been sold, production cost would have dropped, and Sony would have ceased to sell PS3s at a loss. Even though the PS3 console seems to have gotten a few very good exclusive titles recently, and has shown signs of recovery during the past months, it is still a long way to go until Sony will be making a decent profit out of it.

However, as Sebastian noted for Gamasutra, the price cut of the Xbox 360 could prove to be benefic for the gaming sales. He noted that especially the sales of Guitar Hero and Rock Band  could be boosted by Microsoft’s decision.