It is all still rumour and speculation, but everyone knows that Microsoft had to do something when the PlayStation 3 comes out to continue to work on expanding their competitive edge, but now that the Xbox 360 hardware team are busy redesigning the chips provided to the Xbox 360 by ATI and IBM, you might just see a price cut around Chrismas this year.
The rumour is that the Xbox 360 will drop by almost $100, but I, personally, expect it to be closer to the $50 mark, as a $100 price drop only one year after being on the market is a bit absurd. [unless of course Microsoft gives me $100 back or something for supporting them early on.]
If this rumour holds true, you will be able to grab an Xbox 360 for half the price of the PS3 and that will put Microsoft in a great position over 2007, going into the console war.
Source: News4Gamers