I doubt this would have any impact at all on Wii sales as the systems really occupy completely different spaces in most consumers minds (toy versus game system). However, this would probably severely impact PS3 sales if Sony does not counter with their own respective price drop - something they've publically stated they are not willing to do this year regardless of the result to market share.

Well I hope they "Microsoft " tell you that you need to correct your story. The 20gb model was reduced to $299 not $199.

Wow, if this is all true, that's pretty heavily dutily! Seems Redmond is taking aim at the uber-successful Wii! Although improbable, this could cause the Wii to come down in price itself! But as stated, that probably will not happen. Nintendo has no problem running a brisk trade on their motion-controlled console right now. The Wii brand itself as well as general public perception that Wii is and has been the cheapest of the consoles should keep it going.

Sony, however, will certainly have some work to do. They will either have to follow suit and cut the price of their system drastically, or do a better job at overwhelmingly convincing the gaming public why their product is still the one to get. I'm afraid Blu-Ray and Home isn't exactly icing the cake anymore. Sure they may still be focused on the "three console" angle to view their successes. But they really need the PS3 to succeed, if just to keep the fledgling Blu-Ray format afloat.

Microsoft seriously needs to cut the price of their ridiculously overpriced 120GB HDD though, preferably in half! That's my main criticism right now. They have a massive installed base of Premium 360 owners out there that need to upgrade to the larger size, many of which who are waiting until such a price cut occurs. If MS really wants to court the consumer in the way that they appear to want to, this will need to happen, and soon. EDIT: After running some numbers, I figure the best MS can probably do is $129 for the 120GB HDD.

Yet I really must say (if this is price cut is really true) that MS appears to be doing EVERYTHING right at this stage of the console war! Even menacingly so! Microsoft is playing a serious game of ball here, and seems to have covered each and all of the bases (with bloodthirsty goons wielding spiked clubs who'll take your lunch money). They will have the cheapest product, they're going for the exclusives, and they've targeted the mainstream/casual market and Europe as well. I gotta hand it to MS, this is a viscous attack that aims straight for the jugular in a sudden bid for world dominance! Or something like that...