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In an effort to boost Xbox 360, sources including one anonymous retailer say Microsoft will reduce the console's price by US$50 on August 8, just prior to the release of Halo 3.

"We have no announcements to make on pricing at this time," said one Microsoft spokesman when asked for comment. "While price matters, content is king. And no other system is offering all the games people want to play this holiday at a better price than Xbox 360."

The rumor comes amid pre-E3 expectations by analysts that Microsoft would drop the 360's price by $100. That expectation was denied, however, as Microsoft made not price drop earlier this month even though Sony dropped the price of its PS3 from $599 to $499.

The price drop, if a reality, may not be enough says one analyst. "I think the price points are still high enough that they won't stop Nintendo from maintaining their momentum," said Michael Goodman of the Yankee Group.