well, if they do that, i think they are just position themselves to be just like saga dreamcast...
If the Xbox does go the way of the dodo, it won't be because of the price drop. I'm sure Microsoft will be able to cover whatever losses they incur. The plan behind the Xbox was not to make MS millions anyways, but it is an attempt to combat Sony in it's plans to dominate the home entertainment market. Sony has plans to the the PS2 (and subsequently PS3) to be the center of home entertainment (games, DVD, broadband internet) - which kinda conflicts Microsoft's agenda.
After the price cuts, the consoles will be at:
Gamecube $149
Xbox $199
PS2 $199
In actuality, I think I heard that Sony had already planned to drop the prices of the PS2's sometime this summer. So the Xbox's drop in price was probably due to that and sluggish game sales as well.
In the end, it's all about the games. I read somewhere that the Xbox only has from week to week, around 2 titles in the top twenty console games - far behind the PS2 and even the Gameboy Advance.
souja