“At a minimum, we anticipate the introduction of a more feature-packed Xbox 360 as the standard SKU in late 2010 (likely with a 250Gb hard drive) at the same $299 price point, and think that Microsoft will cut price before the fall only if it begins to lose significant market share to Sony.

“It is far more likely that we will see a slim version of the Xbox 360 with a 250 Gb hard drive and with Project Natal bundled into the box while maintaining the $299 price point, especially if Sony does not lower the price of the PS3 by the time Natal and Sony’s Move controllers launch in the fall.”