Xbox 360 price drop is reaction to Blu-ray victory, says analyst

The simExchange Jesse Divnich is convinced that the impended European Xbox 360 price cut is a specific reaction to the recent death of HD-DVD and emerging dominance of Blu-ray.

"I've always considered the console wars to be like a game of chess and Sony's recent Blu-ray victory is equivalent to putting Microsoft in 'check'," he said. "This is why we are talking about an Xbox 360 price cut and not a PlayStation 3 price cut - Sony already made their move, it's now Microsoft's turn."

He added: "Of course, in the short-term this will be a good strategy for Microsoft to position itself away from the PS3 as a cheaper next-generation console, while still being able to compete against the Wii. A price cut will also position Microsoft to take advantage of some of the upcoming releases such as Rainbow Six: Vegas 2 and Grand Theft Auto IV, both of which are multi-platform titles and definite hardware drivers."

Amazon apparently confirmed a 360 drop in the UK this morning, before putting its prices back up just after midday. An announcement from Microsoft is expected imminently.