Sony announces a price cut for the Playstation 3:
Effectively immediately, the price of the PS3 has been dropped to $500 for the 60GB unit, and a $600 80GB model bundled with Motorstorm is coming this August. Pricing is for North America only.
As Ars notes, this erases the price difference between the low-end PS3 and the high-end XBox, but of course you do get a BluRay player too. Of course, Microsoft might cut prices for the holidays, too. In my opinion the ideal counter-move would be to keep teh price the same but bundle the HD-DVD addon drive for free.
All of this is moot, however. Because the Wii is going to get lightsaber combat. ‘Nuff said.