Todd Greenwald, an analyst for Signal Hill, recently told investors in no uncertain terms that the "Xbox 360 needs a real price cut." While Microsoft did drop the price of the console in the US by US$ 50, the analyst believes that it isn't enough in the face of the competition.

According to Greenwald, "We [Signal Hill] remain very skeptical of Microsoft's pricing strategy and competitive positioning versus the PlayStation 3." He expounded on this further:

At US$ 349, with a 60GB hard drive, we just don't think it is a compelling product compared with the PS3 at US$ 399 with an 80GB hard drive (along with more processing horsepower, Blu-ray, Wifi, HDMI, and going forward, more exclusive content.

Further driving home his point, he pointed out that the Xbox 360 has already been surpassed in the U.S. by the Wii, this is despite the one year head start the former console had over the latter.

In addition, he added that the introduction of an 80GB PS3 model which is retailing at the same price as an Xbox 360 40GB "was a strong counter-punch to Microsoft's US$ 50 price cut on the 360."

With regards to games, Greenwald said that the PS3 is already going to be getting the upper hand with all of the exclusive titles that will be coming out:

We think this should give Sony a leg up versus the 360, along with several exclusive titles like the just-released Metal Gear Solid, LittleBigPlanet, Resistance 2, Killzone 2, Gran Turismo 5, God of War 3, etc. Beyond Gears of War 2, Microsoft doesn't seem to have the same library of exclusive, must-have titles.

He put out a solid argument as to why the Xbox 360 should drop its price. However, there are more things Microsoft has to consider before doing this. We'll have to see if Microsoft can indeed drop its pricing to make the Xbox 360 even more competitive.

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