During E3 Microsoft announced a reduction in price for their 20GB SKU and unveiled a new 60GB model unit will be hitting the stores with an RRP of $349.
Todd Greenwald, an analyst of Signal Hill, has said he just doesn't "think it is a compelling product compared with the PS3 at $399" and all its trimmings.
"We remain very sceptical of Microsoft’s pricing strategy and competitive positioning versus the PlayStation 3," notes the analyst.
"At $349, with a 60Gb hard drive, we just don’t think it is a compelling product compared with the PS3 at $399 with an 80Gb hard drive (along with more processing horsepower, Blu-ray, Wifi, HDMI, and going forward, more exclusive content)," he commented.
"We’d also note that the Xbox 360 has just been surpassed by the Wii in the US, despite Microsoft’s one year head start over Nintendo."
"We do think that the Netflix announcement is a significant addition for Xbox users, though its far more of a positive for Netflix than it is for Microsoft in our opinion."
Has Microsoft got a secret price cut ready and waiting for the Christmas holidays? Greenwald would suggest they do or suffer even more loss of ground.