Xbox 360 price cuts looming on the horizon?

While, at its current prices of $299 and $399, the Xbox 360 is already poised to end up cheaper than Sony's upcoming $499-599 PlayStation 3, industry sources quoted by DigiTimes claim Microsoft still plans to slash prices to better compete with Sony. Taiwanese OEM component makers say Microsoft has been negotiating price reductions with its manufacturing partners in Taiwan, who reportedly believe prices can be cut by 15-20% due to a number of factors, including shrinking component prices, lower defect rates, and production scale growth.

The end goal of the cost reduction is to move the Xbox 360 "Premium System" from its current $399 down to $299, the sources say. This drop would allow Microsoft to package its upcoming external HD-DVD player with the console and still come out cheaper than the PlayStation 3. However, Microsoft's Taiwanese arm says the report is "misinformation."

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