This is an interesting little side note that Microsoft's corporate VP of strategy and business development, Shane Kim, knows exactly when the Xbox 360 will be hitting that lucrative $199 price.  It just seems that Microsoft will not be there any time soon.  It seems to me that Microsoft just enjoys being in last place this generation because they just are not willing to cut the price of the 360 to help it reach a larger audience.  

The 360 is approaching it's 3rd birthday in a few months and it's main model's price has only seen a $50 price cut.  Considering the first Xbox was dead on it's 4th birthday (and was half the price it was originally retailed) it doesn't seem like Microsoft wants to hit that mass market price while the 360 is still alive.  Personally I think the accountants have gotten in charge of Microsoft's device and entertainment division and they are happy finishing last if it means they can make a small profit.

With the announcement that the current price drop on the 20GB 360 it would seem Microsoft was making a move to sell more consoles.  It turns out this is just a clearance sale on the 20GB because that model will be replaced with a 60GB model selling at $349.  I hope that Microsoft will be announcing a price cut across all models soon.  Sales of the 360 will continue to decrease unless they cut their price.  I can't see them compete against the PS3 or Wii at their current price point.  If they truly want to beat the PS3 this generation then they need to dramatically cut their price.

Source:multiplayerblog.mtv.com - xbox-360-199-price-point