Yes, we know that everyone thinks they know.  Everyone we've talked to has this secret, official source that has let them know for sure that the price reduction is coming. Is this the next 'worst kept secret'? What's unfortunate is that no one can really, truly confirm a price drop for Microsoft's Xbox 360. It's in the air, and we can almost taste it, but we don't really know for certain. Because of this, chalk the following up to rumors.:

One of our tipsters says that, "If the Hollywood Reporter says it, then it must be so." We don't know about that, but they are coming right out and saying it. Hollywood Reporter says that we should expect a $50 price drop early next month. Someone in the retail world says that the price will be dropped on August 8th, which goes along perfectly with the 'Madden NFL '08 launch price drop' buzz that has been floating about. Again, although it's not confirmed, we've seen and heard it too many times to question it. Someone at Microsoft is giggling now.

Another tipster has heard that $100 CDN will come off all of the Canadian SKUs come August 1st, again coming from 'a good source'. We've heard a little less along these lines, but this is an interesting rumor. We'll wait to see if this pans out.

Lastly, and probably lowest in rank is the rumor that the upcoming Halo Limited Edition Xbox 360 will be the same price as the currently available Xbox 360 Elite, only 100gb shorter in the storage department. Green paint must cost a bunch!

This price drop would throw things right up in the faces of Sony and Nintendo, getting the possible $199 (or $249 depending on who you're listening to) in at a lower price point than the Wii, as well as making Sony's PS3 price drop look a little less special.

[thanks Zero I, Detry, and many others - via Hollywood Reporter]