While Microsoft has long denied any price cuts were on the way, this is simple business sense – why tell consumers before Christmas (when price cuts were last mooted) that the console will fall in price when that period is set to be your biggest profit earner?

The smart money was on Microsoft indeed coming out with a price cut, but doing it well after the Christmas/holiday season, quite possibly in time for the ‘rest of the world’ PS3 launch – a time when interest in games consoles will be red hot once more.

Naturally, there is no official confirmation from Microsoft on any of this – after all, consoles are still selling at full price, and will continue to do so in most retail locations (aside from any special bundles out there) until an official price drop announcement is made.

No other retailers are yet offering the same discount, so there’s no word yet on whether or not this is a once-only incident, or the start a new price structure and blistering marketing campaign in the face of the coming PS3 onslaught.

Still, as The Inquirer points out, this time Steve Ballmer has suggested that price cuts are eventually coming, as quoted in The Seattle Times.

Ballmer said that "I think every console in the world has had a price decrease sometime in the first few years. I don't know whether we'll have a price decrease in the first few years, and I don't want to comment on that, but I will highlight for you that every console has had a price decrease in the first few years".

If Microsoft really wants to spoil Sony’s party, the price cut will either come just before or on the day of the PS3’s launch. But even if it doesn’t, it surely will. For serious gamers, this will hardly matter – they’ll already have an Xbox 360, a Wii, a PS3 and a PC.

For the rest of us, this only puts pressure on Sony and even Nintendo. So while prices may stay the same for some time yet, the consoles themselves will certainly get cheaper, with games, accessories and other purchasable content (game titles, videos, movies, TV shows, music and more) making the real contribution to the bottom line.

This will make for a very exciting 2007 Christmas/holiday season battle of the games console giants – and with the PS3 yet to launch in half of the world, we ain’t seen nothin’ yet!
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Alex Zaharov-Reutt  Consoles  Games  Nintendo  PlayStation  Sony  Wii  Xbox