Amazon's newest ereader is now listed at under $100 in Japan. That's $40 lower than they're selling the ad-free model on Amazon.com, and it stands as a warning to the competition.
Amazon will not be undersold. Just like we saw in 2010, Amazon is more than willing to get into a price war to make sure that doesn't happen. This is great for consumers in the short run, but in the long run it's going to thin out the competition.
The only reason Kobo can afford to go toe-to-toe with Amazon is that they have Rakuten's deep pockets to hide in. This in effect puts Rakuten and Amazon in an elaborate game of chicken, and I cannot predict who will blink first.