Microsoft may be dropping the price of the mid-range model of the Xbox 360, if a scan from an upcoming Kmart circular can be trusted. The price slashing to $299 may not just be an effort to kick start lagging Xbox 360, according to a "usually trustworthy source" of Ars Technica's. Communication passed on via their mole points to a new, 60GB hard drive-equipped model replacing the current 20GB model, a change that's alleged to be announced at E3.
Ars Technica's source writes that the new hardware SKU will be launched "throughout July" and that the 20GB model will be officially discontinued. Consider this rumor, Microsoft-style, for now, but don't be surprised when whomever's piloting its E3 keynote mentions some extra storage breathing room.