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Why Microsoft needs Xbox 360 price cuts?

Microsoft announced that it has dropped the price of its Xbox 360 considerably in Japan to help fend off Nintendo and Sony and try to cement itself in the single country that has practically forgotten about Microsoft all these years.

According to the company, the Xbox 360 Arcade will cost just $183–less than the Wii and Playstation 3–and 120GB model will come down to $368 from $442.

Bringing the Xbox 360 down to $183 is an important move for Microsoft. It not only brings it down to that magic price point where the mainstream would finally take notice, but it gives Microsoft a much-needed competitive advantage over Sony and Nintendo–pricing.

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