According to an interview with The Wall Street Journal, a Microsoft exec noted that about 75% of hardware sales take place following a price cut below $200. What's more, GameStop (GME) has boosted its expectations for Xbox 360 sales following the price drop, telling BusinessWeek that it expects sales to jump "anywhere from 1.5 times to 3 times current levels" as a result.

But while MSFT expects to continue to outpace Sony's PS3 sales, Nintendo may already be untouchable. In an interview with BusinessWeek, Don Mattrick, senior vice-president of Microsoft's Interactive Entertainment Business, said "I'm not at a point where I can say we're going to beat Nintendo."

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