Rumor has it that Microsoft is planning to drop their Xbox 360 price by $100 through reduced part costs. On Wednesday, Taiwanese Digitimes reported, while naming no sources mind you: "[Microsoft] has negotiated reduced production costs for the Xbox 360 with Taiwan-based manufacturing partners, stated the sources. The manufacturers estimate that the total production cost can be reduced by 15-20% due to diminishing costs for most components along with increasing production scales and decreasing defect rates, the sources pointed out."
Though Microsoft Taiwan denied the rumor, the report suggests that the move is intended to equip the Xbox 360 premium sku with the external HD-DVD drive that costs $200. So in essence, this means the company would need to reduce the price of their premium console and their newly announced HD-DVD drive by $100 each. That ain't happening. Granted, the console is nearly a year-old, so while the possibility of reduced part costs is plausible, the possibility of a Microsoft price drop is another question altogether.
Still, a 360 price drop this year could put the damper royal on both Sony's and Nintendo's plans, however unlikely.
See also: Rumor: new, cheaper Xbox 360 this holiday
[Thanks, Jeremy; via Play Girlz]