Morningstar analyst Toan Tran believes that the recently announced Xbox 360 price cut is more about Microsoft gaining market share, rather than making a profit on their hardware.

"[The price cut is] a way to get a foothold into people's living rooms," Toan said.

"Microsoft wants to drum up demand for the holiday. Microsoft's long-term vision for the Xbox is not to turn a profit today."

Tomorrow, the Xbox 360 will receive significant price cuts on all three of their console SKUs. The Arcade unit will be $199, the Pro will be $299 and the Elite will be priced at $399.

[Play.tm - MS forgo profit with 360 cut]

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