The timing of the price cut could be a reaction to Sony's recent PS3 price snip. Microsoft recently stated it wasn't feeling any pressure to reduce the price of the Xbox 360 in Europe. Meanwhile, in America, the system has performed consistently well in the later years of its life
Update: Microsoft tells Joystiq that "Walmart made an independent decision to implement this temporary price cut." Full statement after the break. Microsoft statement:
"Walmart made an independent decision to implement this temporary price cut. We've made no announcements about price drops, and do not discuss our pricing plans in advance. Xbox is the number-one selling console in the U.S. for 13 of the past 14 months, and is showing record growth. With an incredible line-up of games and entertainment, we're expecting the biggest year in Xbox history as the best-selling console worldwide."