MS will have to come down on price at some point, it might mean dropping Kinect from the bundle. £430 is far too expensive for the casual gamer, they will be the first to drop too because they are the most expensive. Nothing to do with desperation.
There was massive ridicule for Sony and the PS3, who remembers giant enemy crabs & Riiiidge Racer? No rumble in the controller, George Foreman Grill, higher pricepoint, hell the first mock ups of the PS3 controller were offensive enough!
Now the shoe is on the other foot and suddenly nobody can take it?
Sony got a bit too big for their boots last time around and ate humble pie, this time its Microsoft's turn.
Most sensible post in this thread.