Sony Drops PS3 Price - Will Xbox 360 Follow?

Gamescom is one of the biggest game shows of the year. Today, Sony officially announced that the PS3 will now retail for $249, 249.99 Euros, and 24,980 Yen. This new price is effective immediately, and is a relatively large improvement considering the PS3 previously sold for $299.

In addition, Sony officially announced that the 320GB PS3 will drop from $349 to $299. A limited edition package with InFamous 2 is now available at participating retailers across North America. This package sells for $299 and includes a 320GB PS3, a copy of InFamous 2, and a 30-day membership of Playstation Plus.

It remains to be seen if Microsoft will follow suit with a price drop for the Xbox 360. Usually when a videogame company sees a competitor drop the price of a console, it means a price drop will follow shortly afterwards. If we do not see Microsoft do this, it may be a mistake -- possibly caused by the large number of Xbox 360 bundles currently available on the market.

If I were at Microsoft, I would lower the price of the 4GB Xbox 360 from $199 to $149. I would lower the price of the 4GB Kinect bundle from $299 to $249. I would lower the price of the $299 250GB Elite unit from $299 to $249. I would also lower the price of the 250GB Kinect bundle from $399 to $299.

I know Microsoft has the ability to make these price adjustments based on the excellent deals currently being offered at stores such as K-Mart and Meijer. For example, deals where you buy an Xbox 360 and you get a $50 gift card. Personally, I don't think we will see Microsoft make any price adjustments until the "Buy a PC get an Xbox 360 free" deal expires. This allows the Xbox 360 to have a higher "value" in that deal. Afterwards, I would expect a price drop shortly afterwards.