I don't think Sony would drop the price, they'd likely try to enhance value like they've done with the PS3, so they'd maybe include PS+ free for a few months plus a free game or two when signing up for +, which would help them push that.
IIRC there were rumors that Sony was prepared to go to $349 if Microsoft was at $399 or tried the $299 contract deal, but that might have all been conjecture.
I really thought that an aggressive $299 price to start with (and losing some to build the install base) but keeping it at that price for say 3-4 years might have been a good move. Basically come out and say that you think the price is good and that there won't be any price drop for a long while so there's no reason not to buy one as soon as possible. Then be aggressive about lowering your component cost (die shrinks) to get profitable ASAP.
I certainly wouldn't complain if Microsoft tried to go to $399 and Sony moved to $349 or less.