Rumor: new, cheaper Xbox 360 this holiday

According to Britxbox.co.uk, a source close to Microsoft has confirmed plans to cut the cost of Xbox 360 as the holidays roll around, and more importantly, just as Sony unleashes the PlayStation 3. The source told Britxbox that the price cut would be the result of a "new" and "cheaper to manufacture" version of Xbox 360, suggesting that the Xbox team is working to redesign elements of the chip set supplied by ATI and IBM to achieve more cost effective production.

But, just as Peter Moore told us at CES, PlayStation 3 will sell out at launch no matter how much Microsoft reduces -- and releases. That's not to say that an Xbox 360 price slash wouldn't help Microsoft's standings in the long run.