Hot on the heels of Sony's recent $100 60GB PS3 price drop, gamers and industry analysts the world over are predicting that Microsoft will soon announce a cheaper Xbox 360.
Micheal Pachter, a Wedbush Morgan analyst who has gone on the record to predict a price drop, claimed that Microsoft will reduce the Xbox 360's prices across the range. He said this will see the Core and Premium models' prices both drop by $50 to $249 and $349, respectively, and the black Elite by $80 to $399.
One way Microsoft could achieve this is by reducing its production costs for the Xbox 360. It has been rumoured for some time that Microsoft is working on a cost-reduction project, codenamed Falcon. This could see the Xbox 360's core processor and graphics chip components swapped over to a 65nm production process from the larger 90nm process currently used for the console's chips.
This would allow the Xbox 360 to deliver the same level of performance, but with less heat as a byproduct, in turn allowing Microsoft to fit the console with a cheaper cooling system than it does at present.
Heat levels within the Xbox 360 have already caused Microsoft some substantial financial problems.
Of course, Microsoft has denied any potential price cuts for the console... just as Sony was doing mere days before announcing the $100 price reduction.
Earlier this week, Darren Huston, corporate vice president at Microsoft, said it had no plans to drop its prices in Japan, stating that the console's Japanese price is "very competitive". This despite the console's poor showing in the H1 2007 sales tally there.