With Nintendo pricing their Wii at $249.99, I would be absolutely shocked if Microsoft doesn't take full advantage of the situation. All they have to do is drop the price of the Core system by $50, and they can have a direct head to head comparison with the Nintendo Wii. Some people will say that they are competing for two different kinds of gamers, and two different kinds of markets, but I beg to differ. Both companies are trying to sell their systems to gamers that happen to have $250 plus tax to spend on a new gaming system.
If the 360 core system and the Nintendo Wii are sitting side by side on the GameStop shelf with a big $249.99 sign in front of each one, then I think it makes the decision making process a little more difficult for gamers that originally had their minds set on getting a Nintendo Wii. Sure, with the Wii you get Wii Sports packed in, (a $34.99 value in my opinion), and you get a fully functional system. (at least I think it's fully functional) Some gamers might need component cables, but it's the same for the 360 core. You have to buy the component cables extra. The Wii comes with the real deal controller, while the 360 tard pack comes with the wired 360 controller. Also, with the 360 tard pack, you pretty much are forced to get a memory card, but no need to get into semantics
The bottom line is that if both systems are sitting there at $249.99, I think it makes it a much more compelling argument. I still would expect most gamers to stick to the idea of getting the Wii, and not waver, but I'm guessing that as many as 3 out of 8 prospective Wii customers could change their mind at the last minute and go with a 360. Let's face it, the Wii has it's advantages and the 360 has it's advantages. The big advantage with the 360, is that you are getting some serious next gen hardware, and you are getting games that aren't quite as "kiddie" in nature. With the Wii, the big advantage is the fact that they are going with a different philosophy and control scheme, and idea around basic, fun games without all the razzle dazzle. It will depend on the gamer. If the gamer likes Nintendo, but isn't so thrilled with all the "kiddie" games, they could easily turn to the dark side. But if the gamer really enjoys the kiddie games, and is really looking forward to the new control scheme, they probably won't waver and will stick to the Wii.
In any event, Microsoft would be absolute idiots not to match the price of the Wii with the core system. As for when they will actually do it, I'm thinking that November 1st is a good time to launch the pre-emptive strike. Also, I think Microsoft should sweeten the deal by adding in 2 free months of Gold Service, as well as 800 free Microsoft points, and also a demo disk with some basic demos of various 360 games. Those freebies will cost MS virtually nothing, but will help then alot when people are making their back and forth comparisons between the Wii and the 360 core package.