Reports have been coming out about a possible price drop for the Xbox 360. The reality though is that Microsoft just wants the price to be below the PS3Washington (EON) - Reports have been coming out about a possible price drop for the Xbox 360. The reality though is that Microsoft just wants the price to be below the PS3.

Microsoft is going to have a very difficult time getting the Xbox 360 down to the mass market price point the Nintendo Wii currently occupies at $249.99. The premium Xbox 360 and the one which MS sells the most currently retails at $399.99 and has been at that price point for a year and a half now.

A price drop could possibly put that console in the price range of $299.99 putting it almost head to head with the Nintendo Wii.

The wild card though is Sony with the PS3 as the real competition for Microsoft is them. This is because the PS3 and Xbox 360 share the same gaming audience while Nintendo has its massive niche of new casual gamers.

So with the PS3 now at $499.99 you may see Microsoft drop the price of the Xbox 360 not to compete with the Wii so much, but instead to further distance themselves from the PS3 to garner more sales away from Sony. The less units Sony sells, the more games the Xbox 360 gets due to its larger installed user base.