In a recent interview with a well known gaming site, Shane Kim, corporate VP at Microsoft Game Studios answered a few questions regarding the company's strategy in answering Sony's price cut for the PS3. Kim, as Sony's Peter Moore, doesn't exactly see a price reduction occurring with the PS3 at the moment, but claims that the company has to achieve the mass-market price ($199) with the Xbox 360 sometime.

Anyone looking at those figures will surely say, "Wait a minute! If MS wants to reach that price with the Xbox 360, then the machine's first price cut should be announced soon, right?" Probably so, but let's just see what Kim had to say when 1UP asked the question below:

1UP - "What is the mass-market price, and when will Xbox 360 achieve that?"

Shane Kim - "If you look back in history -- again, it's not just going to follow what's in history -- in some cases, 75 to 80 percent of the business gets done $199 and below. So, we're not quite there yet. I think that number can change over time because of inflation, greater capabilities; what we can do what Xbox 360, even the core system, is far beyond what you could do before in previous generations. Who knows? Maybe $249 will be a mass-market price point -- but historically, $199 has been when you're talking a PlayStation 2-like install base. 80 percent of the business gets done at $199 and below. We're like the other guys, right?

We're trying to drive costs out of the system as much as possible so we can hit those price points. We're a little closer than Sony is with PlayStation 3, thankfully, but we're all trying to get that magic price point."

Of course, asking Kim whether they are "going to move toward that in '07" or not was inevitable:

Kim: "Stay tuned. We didn't announce anything here, didn't feel the need to. July is a very odd time to announce a price reduction. I'm not even sure Sony announced a price reduction, anyway (referring to THIS probably), but we don't feel the need to do it here at E3."

Soon-to-be-Xbox-360-owners can rest assured, since the machine will indeed see a price cut by early 2008, or even during the winter holiday season. And when it comes to the Xbox 360, Microsoft can do the same as Sony in transferring the Premium SKU's price to the Elite. It'll work for them, I'm sure.