In the wake of yesterday's European Xbox 360 price drop, US analysts have said they expect similar action from Microsoft in America before the end of the year.
"I expect a 360 price cut before Xmas, perhaps to $299 for the premium model," said Wedbush Morgan's Michael Pachter. "If Sony cuts the price before then, I expect Microsoft to cut to at least $50 below the price of the PS3."
Colin Sebastian, an analyst with Lazard Capital Markets, agreed that a US price cut is a strong possibility.
"We believe price cuts are also likely in North America on the Xbox 360, possibly combined with the long anticipated announcement of a new hardware sku with a larger hard drive," he said.
"As for PS3, Sony probably takes a wait and see approach as to whether Blu-ray momentum and an improving software line-up can sustain higher demand, although competitively they may be left with little choice if pricing continues to limit market share."