“We had to reach and surpass key milestones [before we dropped 360’s UK price]. We had to get to let a level of momentum that we’ve now achieved: We’ve taken 42 per cent revenue share of next gen-games market – including hardware, peripherals and software, as well as the stunning performance of Live. We’re consistently attaching games at high level – we’re now at north of seven games to every console. That’s considerably more than our competitors and something we’re immensely proud of. On top of that, we’ve worked our way to a 17.7 million units worldwide installed base – and Europe is a critical geography within that figure. The ability to continually drive cost through the console is what has allowed us to open up the price of the system now.” – VP of Microsoft Interactive Entertainment Europe Chris Lewis

I am not sure where Microsoft gets there info from. Probably the same place that told them that there HDDVD would out due Blue ray.