Well this is an interesting tactic. Sit and see if your competition succeeds or not.
We believe that the company will attempt to disrupt the Xbox 360 launch with a price cut, and as a result may succeed in diverting attention away from the higher priced next generation console. We expect the Microsoft to attempt to engineer the Xbox 360 to be compatible with the current generation Xbox, and as a result, believe that Microsoft will maintain $149 pricing for its money-losing hardware.
Wow. Sony, you have a nice set of bajoombas. Read it. (Thanks, Anubis!)