According to a Blockbusters' memo leaked to us today Sony is permanently dropping the price of the discontinued 40GB model of the Playstation 3 starting Sunday.

The price drop, which was verified by calls to a number of Blockbuster stores, will drop the 40GB model to $360 and an PS3 40GB bundle with an HDMI cable, Spiderman the movie and Transformers the game to $400. Stores that have trade-ins of the PS3 40GB will be selling it for $360 as well.

While the $40 or so price drop isn't much, maybe it signals other drops in line for the other versions of the console in the near future. Or perhaps Sony is clearing stock to make room for a Tokyo Game Show announced new SKU for the Playstation 3.

Update: Despite what the memo said, and what was repeated to us by a handful of Blockbuster employees across the country, SCEA says that this price cut did not come from Sony but rather is something Blockbuster is doing, likely to clear stock.

* Xbox 360 Arcade - $199
* Xbox 360 - $299
* Xbox 360 Elite - $399

Yes, that makes the Xbox 360 officially the least expensive current generation console following an $80 price cut on the Arcade model. Here's to hoping that helps Microsoft's recent hardware sales woes.

Reader Patrick sent in these pictures this morning of the Radio Shack circular for the week starting Sept. 7 which appears to verify at least two of those prices: The Elite for $400 and the Arcade for $200.

Hit the jump for the close-ups.

With price cuts possibly on the horizon that could bring console prices closer to the Wii's territory, should Nintendo worry? "The Wii audience is not choosing between 360 and Wii," said Wedbush Morgan analyst Michael Pachter. "Either they will buy a Wii only, or they will buy both a Wii and either a 360 or PS3. So Microsoft is right to consider the PS3 as the competition and to ignore the Wii."

Sony is the one, says Pachter, with more to be concerned about regarding possible pricing and feature set changes for the Xbox 360:

"Consumers see two boxes with very similar game experiences, and have to decide if a 360 with a 20Gb HDD, no Internet adapter, a very well-thought out Live experience and an extraordinary game library is a better deal at $349 (or $299) than a PS3 with built-in Internet adapter, a 40Gb HDD, a Blu-ray disc drive, a weak online experience and a relatively thin library of games for $399," said Pachter.

Both Sony and Microsoft unsurprisingly declined to comment on rumors or on their future price strategy.

Said Pachter, "So far, Americans consider the value proposition a toss-up, while Europeans value the PS3 more. Lower pricing and/or enhanced features for the 360 could change that."

The ad scan doesn't indicate further price adjustments for the 'Arcade' or 'Elite' models, but with the lower end SKU currently priced at $279, we would assume that it will have to be adjusted somehow. Consider it rumor for now, but we'll be getting in touch with them to learn more.

Xbox 360 price cut is coming around July 6th, price will be $299.99 [High-Def Digest Forums via NeoGAF]

"I don't really think that Microsoft and Sony are doing badly - just doing badly in comparison to Nintendo," Pachter said. "It makes sense that PS3 and 360 are doing about the same... instead of saying 'what's wrong with Sony and Microsoft,' we should be looking at Nintendo and saying, 'how the hell do they keep doing this?'"

It's easy to peg the answers on the price discrepancies, but Pachter said that's not all there is to it, pointing to Nintendo's success in a mainstream market most gamers are less aware of. "There really are people who play games that don't read Kotaku - I know it's hard to believe," he said. "There are people out there who don't even know how to spell Kotaku, and don't even know that there are websites dedicated to games."

Calling the typical console-fanboy attitude "extremely myopic," Pachter added, "There are actually people out there who have sex. The people on Kotaku, other than their parents, they've never met anyone who's had sex."

Mainstream gamers are mad about Wii Fit, Pachter said, agreeing with fellow analyst Billy Pidgeon who predicted that the Wii would not balance its supply with demand until 2009. So no price drop for Wii anytime soon - but what about the others?

"You'll get a price cut," said Pachter. "I think if I were Sony, I would wait for the Fall, or for the Christmas lineup. There's no reason for them to cut it today [with MGS 4 out]."

Pachter thinks it's likely to see a $50 reduction in the PS3's price. "They'll go $100 if they can afford to," he said, possibly close to the release of LittleBigPlanet, taking a "family bundle" angle.

As for Microsoft, Pachter said they won't stand for having the 360 and PS3 on level pricing ground, and will probably implement their own price drop commensurately. "Madden was an event for Microsoft last year, so perhaps you'll get a 360 cut with Madden. But I think if I were Microsoft, I'd maybe cut it in front of Gears 2."

Pachter also anticipates possible future supply constraints for Wii, based on Nintendo's history of consistently underestimating demand - he also thinks their attach rate estimates for Wii Fit are a bit lower than they'll turn out to be.

"That's obviously fairly significant, given we didn't have too much time to communicate it to our consumers. So with a lot more of the marketing kicking in now we expect it to grow even more in the coming days and weeks."

UK Xbox 360 sales up 40% [GamesIndustry.biz]

Rumours suggest Xbox 360 price cut this month [GamesIndustry.biz]

Wal-Mart Canada Sale Hints at New 80GB PS3 Price [DailyTech]
[Thanks, xIvSlowDeath420]

FCC Filing Provides Peek at New PlayStation 3 Model [DailyTech - Thanks Nick!]

* 80GB PlayStation 3: $499.99
* 40GB PlayStation 3: $399.99
* Spider-Man 3 Blu-ray movie pack in with one, or both
* PlayStation 2: $99.99

$400 40GB PS3 with Spidey 3 Blu-ray pack-in? Our mole tells all [Ars Technica]

Wedbush Morgan Securities analyst Michael Pachter said in his latest report, "We note that Sony recently acknowledged that it will no longer produce its 60Gb PS3, and we expect the price of the 80Gb PS3 to be reduced to $499 before the holidays, maintaining a premium SKU at that price point."

Analysts: 80GB PS3 to Drop to $499 This Year [GameDaily BIZ]

Oh, but that's inflated Canadian money, you say? Not the real, green, American, smells-like-Wendy's money like we have here? But actually, $100 CND equals $97 USD by current exchange rates. Yeah, the difference isn't anywhere near that miles vs. kilometers standard that always makes their speed limits sound so high.

So why the price drop? Canadians had been paying almost $100 more for each SKU. Their Premium is actually running $378 USD after the drop. No worries, America still rules!

Thanks Steve!

The rampant speculation, the endless images of circulars, the bogs of "insider emails" are all correct: The Xbox 360 is getting a $50 price drop starting this Wednesday, Microsoft announced tonight.

As of Wednesday the Elite will be $449, the Halo Limited Edition Xbox 360 (when it hits) will be $399, the standard will be $349 and the core will be $279.

The price drop is meant to be timed to the upcoming release of Madden 08, said Aaron Greenberg, group product manager for Xbox 360, as a way to grab up all of those Playstation 2 Madden fans who haven't yet upgraded to the Playstation 3.

"Madden is the number one selling game, and we felt like that was the right title to lead with," he said. "We know Madden will bring a lot of PS2 owners into the store and that's a specific reason for this timing. We feel we have the showcase platform for Madden this year and with this drop we hope to be the home for those gamers this season."

Greenberg said that the decision to time the price drop with the release of Madden has been in the works for a very long time and that the 360 price drop has nothing to do with the recent PS3 pricing flux.

"We've had this on our plans for a long time, an extremely long time," he said. "We did not make this decision even heading into E3, this is all based on before hand. We had the first media briefing (at E3) so we could have been the first to announce it, but it was never on our calendar. The benefit of pre-planning, of having this time, outweighed being one-upped, perhaps, at E3."

Greenberg pointed out that the 360 has been the same price for 21 months, the longest any console has maintained their launch price.

Too bad Microsoft didn't drop the core down a bit more and make it competitive with the Wii. I think $249 would have made things very interesting for Nintendo.

Microsoft Lowers Price of Xbox 360 by $50

Price drop coincides with release of "Madden NFL 08" on Xbox 360, one of many titles that make up the greatest holiday lineup in video game history.

REDMOND, Wash. — Aug. 6, 2007 — Microsoft Corp. today kicked off the greatest holiday lineup in video game history by announcing it will reduce the retail price of Xbox 360™ by $50 (U.S.) beginning Aug. 8 at United States retailers nationwide. Soon to follow, Electronic Arts Inc. (EA) will release its blockbuster video game title "Madden NFL 08" on Aug. 14. "Madden NFL Football," one of the most important mass-appeal franchises in video games, was the top-selling game of 2006 and is the top-selling franchise of the past 10 years. Only Xbox 360 offers a console for all interests and budgets.

"The fact that we have been able to keep our launch price longer than any other console while retaining our leadership position demonstrates that consumers believe in the value of Xbox 360," said Mitch Koch, corporate vice president, Global Retail Sales and Marketing Group, Entertainment and Devices Division at Microsoft.. "On the eve of the best holiday games lineup ever and the launch of 'Madden NFL 08,' there has never been a better time to jump into Xbox 360."

Xbox 360 will enhance the value of its entire family of consoles beginning on Aug. 8. At a new price of $349.99, Xbox 360 offers an unsurpassed experience right out of the box with a 20 GB hard drive, wireless controller, Xbox 360 headset, and more. For those looking for the ultimate value and the freedom to customize their console as they see fit, Xbox 360 Core System now has an estimated retail price (ERP) of $279.99 (U.S.). Xbox 360 Core System provides everything gamers need to hit the ground running while giving consumers the ability to add new features and accessories they want. Dressed in black and equipped with a 120GB hard drive, Xbox 360 Elite will be priced at an ERP of $449.99 (U.S.) for those who want the premium games and entertainment experience. In anticipation of this year's largest blockbuster game launch, the Xbox 360 Halo® 3 Special Edition Console will hit store shelves in September with an ERP of $399.99 (U.S.). Featuring an authentic Spartan green-and-gold finish, this console will include a matching Xbox 360 Wireless Controller, Xbox 360 20GB hard drive, Xbox 360 Headset an Xbox 360 Play and Charge Kit and more.

In addition to being a great value, Xbox 360 is the only place consumers will be able to play all of this year's biggest titles: "Guitar Hero III™: Legends of Rock" (RedOctane/Activision), "Halo 3" (Bungie), "Madden NFL 08" (EA) and "Rock Band" (MTV Games). Xbox 360 is also home to the most exclusive games, such as "Ace Combat 6: Fires of Liberation" (NAMCO BANDAI Games), "BioShock" (2K Games), "Lost Odyssey™" (Mistwalker and feelplus Inc.), "Blue Dragon" (Mistwalker and feelplus Inc.), "Scene It? Lights, Camera, Action," (Screenlife), "Naruto: Rise of a Ninja" (Ubisoft), "Project Gotham Racing® 4" (Bizarre Creations Ltd.) and "Mass Effect" (BioWare Corp.). With a record-setting attach rate of 6.1 games per console sold (NPD, June 2007), a new price and the greatest holiday games lineup ever, Xbox 360 has proved itself as the home of the best games and entertainment at the best value.

Walmart & Toys R Us Ads Confirm $50 Xbox 360 Price Cut [CheapAssGamer]

XBOX 360 $50 price drop - walmart ad [CheapAssgamer]
[Thanks, OGHowie]

The $100 price drop started yesterday when a Circuit City ad surfaced saying the PS3 was going to be selling for $499. Then GameDaily confirmed with "a merchandising manager at one of the world's biggest retailers" that the price drop was true.

Today we've received word from moles at both Best Buy and Target that they too have word of a price drop. Our Target mole reports that the retail chain's inventory tracking program is listing retail for the 60GB PS3 at $499.99. And a mole at Best Buy tells us they just received their upcoming ads and that they all list the PS3 price at $499.99 as well.

Great conspiracy? Lots of lying moles? A fact-spinning Sony president? Only time will tell.

David Hufford sent fellow Microsofter John Porcaro an email today to try and clear up the whole "the Xbox 360 price is dropping", "the Xbox 360 price is dropping" fever that seems to be hitting a crescendo.

In it he writes that the interview with Bloomberg was done quite awhile back and then complains about the picture we used of him in our post.

"Some are getting really spun up about the Bloomberg story and inaccurately reading tea leaves that don't exist. I spoke to Bloomberg nearly two months ago and we were talking about NPD data that had just been released, and chatting generally about price points of consoles in the market. The comment, which is accurately reported, unfortunately has now been taken way out of context and being reported as if I am signaling a price drop. I was not, I am not.

With Xbox 360s selling well at their current price point, Elites selling out at $479, and an insanely great portfolio of games in the market, there's no reason to announce any kind of price drop anytime soon.

BTW, what's up with the picture in Kotaku? What was I, like 12? Huff."

Keep in mind that just because he wasn't "signaling a price drop" it doesn't mean one isn't coming. That's the sort of thing you don't really announce ahead of time, lest you kill of sales of the system at the current price. Brian Crecente

No Xbox 360 Price Drops Announced [Gamerscoreblog]

Microsoft Game Studios' Forza Motorsport 2 hits shelves on Tuesday and to celebrate Microsoft is dropping the price of the Xbox 360 Racing Wheel from $150 to $130.

Microsoft is also kicking off a Forza Motorsport 2 Race Weekend which will run from June 1 through June 3. The online event will include Livery contests, gameplay sessions with developers and a leaderboard tournament. They'll also be giving out some newly cheapened Wireless Racing Wheels.

Hit the jump for the full press release. Brian Crecente

"Forza Motorsport 2" Races Into Living Rooms on Xbox 360 Worldwide
Microsoft celebrates the 91st Indy 500 with release of "Forza Motorsport 2" on May 29; announces price drop for the Xbox 360 Wireless Racing Wheel, now available for $129.99 ERP.
REDMOND, Wash. — May 25, 2007 — Microsoft Game Studios today announced that "Forza Motorsport® 2" will speed onto U.S. retail shelves Tuesday, May 29, and that the estimated retail price (ERP) of the Xbox 360™ Wireless Racing Wheel has been lowered to $129.99 in the U.S.
Timed to mark the biggest racing event of the year, these announcements are sure to ignite the driving spirit in gamers and car enthusiasts alike as the 91st Annual Indianapolis 500 kicks off today.
Tuned and developed with the Xbox 360 Wireless Racing Wheel, "Forza Motorsport 2" supports true force feedback, setting a new precedent for realism in the racing simulation genre that will have gamers feeling every bump in the road and every jolt of acceleration as they take the corners on 12 of the most renowned tracks on the globe. With the game running at an astounding 60 frames per second, authentic simulation physics, and rumble functionality with the Xbox 360 Wireless Controller, "Forza Motorsport 2" offers incredible realism and depth for a complete racing experience in gaming.
In addition, to mark the release of the new title, gamers in the U.S. will be able to participate in the "Forza Motorsport 2" Race Weekend, running June 1 through June 3. Gamers will be able to participate in a "Play and Win," Livery contests, gameplay sessions with developers, and a leaderboard tournament. Xbox 360 Wireless Racing Wheels and other prizes will be awarded to winners. Gamers will experience all the racing excitement they can handle with the following new gameplay experiences:
• Collect, upgrade and tune hundreds of cars. From sport compacts to purpose-built race cars, "Forza Motorsport 2" offers more than 300 cars from over 50 of the world's leading manufacturers such as Ferrari, Porsche, Nissan, Volkswagen, General Motors and Lamborghini. Players can take their car to the garage and install alternative engines, suspension kits, bolt-on superchargers, brakes, rims and racing slicks. Players can also dial in advanced suspension settings, tire pressure and gear ratios.
• Experience an uncompromising physics simulation. Top automotive engineers, professional race car drivers and experienced programmers teamed up to create a complete racing simulator experience. Cars incur dramatic damage and wear, which affects vehicle performance. Advanced tire and suspension models that respond to heat and pressure changes as well as weight transfer and aerodynamic load are just a few examples of how the gamer plays both crew chief and driver.
• Master real-world tracks from around the world. From the famously challenging Nürburgring Nordschleife to the green hills of Tuscany, gamers can race on meticulously designed tracks with an incredible sense of speed and realism. "Forza Motorsport 2" features 47 ribbons across 12 environments, including real-world licensed circuits such as Mugello, Suzuka and Sebring International Raceway.
• Create and share a masterpiece with the world. Players can express their inner artist in the paint and upgrade shops with nearly endless personalization options. They can customize the shape of their car by combining different licensed rims, performance parts and aftermarket body kits and create a unique paint scheme using millions of paint and decal options. Then racers can hit the track and take in-game pictures of their creation in the "Forza Motorsport 2" Photo Mode, or sell their work of art to an eager community for in-game credits over Xbox LIVE® using the "Forza Motorsport 2" Auction House.
• Literally feel the road, just like a professional driver. Through the rumble functionality in the Xbox 360 Wireless Controller, players will feel uncompromising responsiveness to every acceleration, downshift and turn, making the racing experience as true to life as possible. With the latest improvements to rumble, force feedback and wireless technologies, form and function are placed into high-speed gaming motion, letting racers feel every bump around the turns at famous tracks such as Sebring as well as the differences in handling and stability in each car they drive.
• Compete in a vibrant online community. Gamers can take their personalized car onto Xbox LIVE for some intense online wheel-to-wheel racing. They have the option to compete in private online sessions with friends or in large public tournaments on Xbox LIVE in the seamlessly integrated "Forza Motorsport 2" Career Mode.* They can earn in-game credits and even complete single-player career objectives while racing over Xbox LIVE. Or they can sit back and watch the best racers from around the world compete on "Forza Motorsport 2" TV.
Fans can continue to visit http://www.xbox.com and http://forzamotorsport.net for more information, screen shots and videos.
From the creative minds at Turn 10 Studios, "Forza Motorsport 2" is the game that offers something for every type of racing and car enthusiast, such as optional driving assists for the novice and gameplay options for the serious car aficionado that include the ability to tune, trade, paint and collect players' favorite cars. With Xbox LIVE, players can share and sell their custom creations on the "Forza Motorsport 2" online Auction House and experience an impressively accurate simulation, putting their performance-tuned rides to the test against the best the online world has to offer. "Forza Motorsport 2" will be widely available at retailers nationwide May 29 for an ERP of $59.99.
About Turn 10 Studios
"Forza Motorsport 2" is developed by Turn 10 of Microsoft Game Studios. The experienced development team led by Dan Greenawalt is composed of top developers and real race drivers and car collectors whose pedigrees include work on top racing franchises such as "Forza Motorsport," "Project Gotham Racing®" and "RalliSport Challenge." Microsoft also teamed up with top engineers from the likes of Ferrari SpA and Toyo Tires to create incredibly realistic driving physics in a racing simulation game.
About Microsoft Game Studios
Microsoft Game Studios is a leading worldwide publisher and developer of games for the Xbox® and Xbox 360 video game systems, the Windows® operating system and online platforms. Comprising a network of top developers, Microsoft Game Studios is committed to creating innovative and diverse games for Windows (http://www.microsoft.com/games), including such franchises as "Age of Empires®," "Flight Simulator" and "Zoo Tycoon®"; Xbox and Xbox 360 (http://www.xbox.com), including such games as "Gears of War" and franchises such as "Halo®," "Fable®," "Project Gotham Racing" and "Forza Motorsport"; and MSN® Games (http://www.games.msn.com), the official games channel for the MSN network and home to such hits as "Bejeweled" and "Hexic®."
About Microsoft
Founded in 1975, Microsoft (Nasdaq "MSFT") is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

Sony's multi-function handheld got a pseudo price drop when the Core Pack was introduced at $199.99 last year, but this marks the first substantial price adjustment for North American gamers. It was recently rumored that retailers had given Sony an ultimatum to drop the price, but we are unsure whether this is a result of that or something else.

With the recent release of Puzzle Quest and the promise of Disgaea PSP and Crisis Core Final Fantasy VII, the new price point is just one more incentive to pick one up. Anyone going to bite?

Thanks to Adam for the tip. Michael McWhertor

Recently, Takao Yuhara indicated that price drops are a part of Sony's plan to expand the market when the timing is right. Is it damaging, this early in the console's lifecycle and just ahead of the system's launch in Europe to already be talking about price drops? Well, do you know what he said was, cost reduction, not price drop, and there's a big difference between cost reduction and price drop. So, that I believe is where the confusion came from. Obviously, we are investing our money in making PlayStation 3s cheaper to manufacture — that's part of our business plan.

You're not going to pass the savings along?
When we can, when there are savings to pass along to the consumer, we would obviously choose to do that. That's the business model.

So, go on. Drop that fistful of Benjamins you copped at your recent Bar Mitzvah. And stop hitting F5 for our breaking news on a cheaper PS3. It's not happening anytime soon. Michael McWhertor

Phil Harrison: Our Competitors Don't Determine Our Lineup [1UP]

We believe it is too early to rule out a PS3 price cut for later this year, which will depend in large part on retail sell-through trends, the evolving competitive landscape, and Sony's willingness to endure further losses on PS3 hardware, offset by potential component cost savings (e.g., shift to 65 nanometer processor).

This excludes the PAL territories, of course. I'm sure they'll be getting gouged for years. More Sony centric analysis, including PSP price cut speculation, at the link below. Michael McWhertor

Analyst: Don't Rule Out PS3 Price Drop in '07... Yet [GameDaily]

So what does a mid-2007 chip manufacturing change mean to you, Joe Consumer? It leads one to conclude that Microsoft won't see the financial benefit of moving to smaller chips, which could also lead to a potentially later price drop. It also means that cooler-running chips are now just that much farther away, meaning cooler-running, possibly more reliable Xbox 360s aren't coming in the spring.

Ultimately, since I'm a selfish prick, what does it mean to me? I'm going to continue to hold out on that Xbox 360 purchase. Michael McWhertor

65nm Xbox 360 CPUs delayed until mid-2007 [Digitimes]

EB/GameStop's latest newsletter brings us news of some interesting price drops just in time for the holidays. The EB/Gamestop exclusive Final Fantasy XII Collector's Edition has dropped from $59.99 to $49.99 making it the same price as the plain-Jane edition. The Collector's Edition comes in the requisite fancy metal box, and includes:

• Developer's Interviews
• History of Final Fantasy featurettes
• Final Fantasy XII U.S. Trailers
• Final Fantasy XII Japan Trailers
• Final Fantasy Art Gallery

Square/Enix's Kingdom Hearts II also receives a drop from $49.99 to a paltry $29.99 and if you can make it past the stomach churning Little Mermaid levels, it's totally worth the money.

Speaking of stomach churning, if you're feeling brave, stop by and check out the gallery of photos from EB/Gamestop's "FF XII Dress-up and Win Sweepstakes". Not for the faint of heart... Flynn De Marco

Final Fantasy XII CE for $49.99 [GameStop]
Kingdom Hearts 2 for $29.99 [GameStop]

Ken Kutaragi did not say whether that price cut will be coming to the U.S. as well.

HONG KONG (MarketWatch) — Sony plans to reduce the price of its soon-to-be-released PlayStation 3 game console, the head of its game division reportedly said Friday. Ken Kutaragi, president of Sony Computer Entertainment, said at the Tokyo Game Show that the console's less expensive version would now sell for 49,980 yen ($429), according to media reports. Kutaragi attributed the price cut to customer complaints that the console was too expensive. The PS3 is scheduled to be released on Nov. 11

I've been told a press release is coming out tonight, hopefully it will have more official word. Sony has confirmed to me that HDMI out will now be present in both versions of the PS3 worldwide.

I've added the press release that Sony just sent out. It doesn't add anything new. I've also emailed to ask if there is any comment on the U.S. price, but I don't expect to hear anything until tomorrow at the earliest. Brian Crecente

Tokyo, September 22, 2006 - Sony Computer Entertainment Inc. (SCEI) today announced that PLAYSTATION 3 (PS3) with 20GB hard disk drive (HDD) will come equipped with HDMI(*) (Ver 1.3/supporting Deep Color) output as standard with the system. PS3 with 20GB HDD will become available in Japan at a new recommended retail price of 49,980 yen (tax included).
Since SCEI first announced product specifications of PS3 at the Electronic Entertainment Expo (E3) in May 2005, demand for enjoying full HD quality image and realistic digital sound through HDMI has grown tremendously. Given the sharp increase in availability of flat displays supporting HDMI in the market, SCEI has decided to equip HDMI as standard on all PS3 systems.
SCEI, with strong support from software developers and publishers, will offer a broad lineup of exciting and innovative titles and vigorously promote the PS3 platform.

I'll make sure to post a full story when we get to the bottom of this and also figure out if the price drop is spreading to other countries.

If you're still holding out on buying a 360 in anticipation of a price drop later this year, better be prepared to pony up the extra cash. Microsoft has vociferously denied any plans to drop the price to stick it to Sony and Webmorgan Securities' analyst Michael Pachter has a pretty convincing explanation on why that just won't happen:

Pachter noted that Microsoft brass has informed the Xbox division that it must turn a profit or at least break even in fiscal 2007, which ends June 30 next year.

He explained, "That means that price cuts on the Xbox 360 will come only if the box costs less to produce, ship, and market than the wholesale price. Our best guess is that the box currently costs around $400 - 450 to produce, and it's likely that the company can get that down to below $400 later this year."

Makes sense to us: the Xbox is great but they've certainly gone a long while without making a profit. In fact, has the division ever turned a profit? Half a decade of loss is likely to make even Microsoft's sugar daddy execs a bit scowly. Florian Eckhardt

Analysts Skeptical of Xbox 360 Price Drop

GamesIndsutry reports that popular retailer, Gamestop, dropped the Giga Pack price from 214.99GBP down to 189.99GBP in Northern Ireland. The Giga Pack includes a PSP, stand, 1 gig memory stick and a USB cable. This price drop, according to Sony, is part of a promotion so snatch up a Giga Pack on the cheap while you can.

GameStop slashes price of PSP Giga Pack [GamesIndustry]

A vexxing price drop this is (if it sticks). Online retailer EBGames is listing Nintendo's mini GameBoy, the Micro, at $89.99. Considering the SP is listed at $79.99, I don't know if I'd really be into having a Micro, but for the niche crowd, the price has slipped. If only this had an NES faceplate. Then the nostalgia would suck the cash right out of my wallet.