Times are changing, trends are shifting, and fanboys are crying. For Microsoft, things are starting to take a turn for the worst. With recent announcements like the XBox 360 Elite with a larger hard drive, a product consumers have been begging for for quite some time, one would think all would be well in the land of Redmond. But Microsoft shot themselves in the proverbial corporate foot with this. Pricing the system at $479.99, much higher than anyone expected; especially considering the lack of HD-DVD or built in wireless, the internet simply let out a collective meh over the whole thing. On top of that, the hard drive itself costs an astounding $179.99. That’s well over the magic number of .50 per/GB for this 120GB drive. In fact, the backlash from this announcement alone was so bad, that Microsoft needed to defend its pricing of the peripheral.

And that was just the start of the trend for Microsoft. Next up on the plate, one of Microsoft’s biggest allies, Epic Games came head to head with the corporate giant over a little issue of content pricing. Epic, being the kind hearted fellows they are, wanted to release a free map pack for their 4 million copy selling game Gears of War. Perhaps you heard of it? You know, the biggest seller on the XBox 360. Well Microsoft in their infinite wisdom thought it be better to simply not allow Epic to post this maps for free. Eventually, a compromise came to be, and the maps will eventually see the light of day for free, only after being on the Marketplace for a set period of time. And to top this all off, Epic’s Tim Sweeney didn’t have very nice things to say about Microsoft’s PC version of the Live service. In fact, some of the things he mentioned were downright scary.

And just when you think things couldn’t get any lower for Microsoft, along comes the Guitar Hero 2 Pricing Fiasco. If digital distribution is supposed to be so damn cheap, how come people end up paying more for digital content than physical media? Apparently in this situation this all has to do with new licensing fees, no doubt because of the popularity of the product.

The bottom line is Microsoft has lost a lot of face in the past 2 weeks. In a time when Playstation 3 sales are still incredibly week, and Wii’s are impossible to find, Microsoft missed a huge opportunity to widen the gap.

To combat the Guitar Hero 2 fiasco I predict we’ll see some sort of a gift from Red Octane, a peace offering of sorts. Perhaps a few previously unreleased tracks for free with the ever popular sponsored by tag attached to them. Perhaps even Microsoft sponsoring them itself.

While I don’t foresee Microsoft dropping the HD price soon, I wouldn’t be surprised if 6 months from now the price drops on both the 120GB and 20GB drive by a good 20-30%. I also think Microsoft is going to be making a few extra moves to increase the perceived value of the XBox Live Gold subscription service. Perhaps more exclusive downloads for actual content instead of demos, or perhaps some sort of discount plan.