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Looking a bit more definite before than previously rumored and/or hoped for, though still not absolutely confirmed yet:

Microsoft Rumored to Drop Xbox 360 Price in August
In an effort to boost Xbox 360 sales, sources say Microsoft will reduce the console's price by $50 on August 8, just prior to the release of Halo 3.

GamePro Staff

In an effort to boost Xbox 360, sources including one anonymous retailer say Microsoft will reduce the console's price by US$50 on August 8, just prior to the release of Halo 3.

"We have no announcements to make on pricing at this time," said one Microsoft spokesman when asked for comment. "While price matters, content is king. And no other system is offering all the games people want to play this holiday at a better price than Xbox 360."

... more at linked article (headline above is linked)

Definitely not as much as had been hoped for, but given that Sony's price cut on the PS3 wasn't a real price cut, and this would be a permanent reduction in the price of the box if it comes to pass, it certainly puts some more pressure on Sony and offers Microsoft a chance to keep up the momentum at the high end of the console market place.

As the article points out, both of the behemoths have to be concerned that Nintendo still can't seem to make enough Wii's to keep up with demand, though Nintendo still has their own share of issues in a dearth of games that people really want to play once you get past a few select titles.

on Jul 27, 2007

I really hope this rumor is true and that a price drop does hit as I love to see the competition and hope to see a lot more people entering into the next-gen (now current generation) console gaming market.  More gamers is a good thing.

Now if it would just lead to price drops on the games

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