Speaking on the now-confirmed American price drop for Xbox 360, Toan Tran, analyst with Morningstar has pretty much summed up the move: it's about selling boxes right now at the expense of profit.
"Microsoft wants to drum up demand for the holiday," he said. "Microsoft's long-term vision for the Xbox is not to turn a profit today.
"It's a way to get a foothold into people's living rooms."
Microsoft confirmed overnight that all Xbox 360 SKUs are to be dropped in price in America tomorrow, with the Arcade cut to $199; the Premium pack moving to $299; and the Elite now costing $399.
The Arcade is now significantly cheaper than Wii in both the US and Japan.
Indications are now pointing to a European drop in a similar vein, although there's been no official comment on the possibility of another drop on the Continent from Microsoft as yet.