CrunchGear

More rumors swirling around that Microsoft will drop Xbox 360 prices next month, most likely at E3. Analysts seem to think it’s because Sony’s got some good momentum going with the PS3 now and that the new Metal Gear Solid 4 bundle should help push the console’s sales, causing Microsoft to drop Xbox 360 prices in order to compete.

What analysts don’t take into account, though, is that Microsoft has no idea there are any other consoles on the market and that competition is a sign of weakness.

I kid! Anyway, David Carnoy of CNet guesses that we’d see $50 price cuts for the Elite and Premium versions, bringing them to $399 and $299, respectively, and that the Arcade version would drop from $279 to $249. That seems highly logical. There’s also some talk of a new SKU, meaning that there’d be a new, different version of the console “with added features” — a Blu-ray drive being a possibility. I wouldn’t hold my breath, though. If there’s anything Microsoft hates more than competition, it’s using a technology that beat their own technology into submission. It’ll take those wounds a while to heal.