Add another piece to the puzzle. We keep hearing about the rumored new Xbox 360 Slim based on the preliminary mock-ups of motherboards that have been making the rounds the last couple days. Then this morning brought more news in the form of external USB HDD support for the Xbox 360. There's more.

It looks like it's all leading up to an E3 announcement where Microsoft will finally be able to reach the magic price point for consoles. A source close to Microsoft's Entertainment and Devices Division mentioned that a price cut is likely to be announced this summer. With E3 being the biggest show this summer (June to be specific), then it only makes sense that all of our questions will get answered in one big announcement.

Based on the information we have so far, we're looking at a liquidation of the current model Xbox 360s for $149. This will open up retail space for the Slims which will likely debut at $199 and then quickly drop in price once the previous "fat" SKUs have been liquidated. Microsoft did this exact same thing when they jumped to HDMI in all consoles.

The most obvious thing is of course the USB HDD which would be required to make the jump to a Slimmer Xbox 360 as the current model HDD is the same height (or width depending on how your console sits) as the Xbox 360. Removing the HDD option altogether limits SKUs and cheaper parts means lower costs. Based on what we're hearing and the evidence so far, we're looking forward to the price cuts and slim announcement at E3.

http://www.gofanboy.com/go-fanboy-news/2163-microsoft-likley-to-announce-149-price-point-for-xbox-360-at-e3/

i see it happening its pretty obvious it will go to 149$ this year but will that sku include natal my prediction is NO also i dont see it dominating the PS3 sales wise as the price gap is 150 not 200 as it was 08 unless sony drops there price sales should be similar to 07 where both HDs where close to each other during the holidays

If true, I think this pretty much puts Sony in last for the rest of this gen.

Except for the fact that the USB device will only be able to use 16 gigs for 360 storage. Good for the Arcade model as they don't have to pack in a Memory card, however the slim would still have to have a HD slot, as they need a sku with a HD.

There's still a good bit of time between now and E3, if these rumours persist it could hurt 360 sales in the interim, like PS3 before the PS3 slim model.

Jups... even thou i; am a sony fanboy if mic comes with a 150dollar x360 the ps3's 299 ps3 just cant compete anymore.

You can use 2x slots for 16gigs each which is 32gigs. Thats plenty of room to DLC and what not.

My biggest issue with the slim is the hard drive. What will MS do for people with hard drives from the older models? Hopefully a transfer cable of some sort at the worst. I'll buy one at $150.

I personally would drop the price as when i would release the slim profits will go way up cause i will make much more profit per console than before the slim and cutting the price removes this benefit. It looks like its trying to compete with ps3 sales than profit. I think microsoft want this generation to pave teh way for the next generation instead of makign back all the losses they made on teh original xbox and RROD.

To me this sounds dumb. Yes i get the money aspect and the competition. But they are doing all of this work so that you can have an attachment to your xbox ? That is dumb and to me is something of taking a step backwards. But oh well microsoft usually knows what they are doing.

One could see the current arcade being dropped to $149, and the Natal equipped Arcade end up being $199, and packed in with a game that is like Wii Sports. They also could sell Natal without the game for $50 or so. This would make sense. Then look for the Elite to do the same. You get a $250 elite without Natal and a $299 Elite with Natal. The new model would end up being Slim.

Why would they drop the price?

1. They're the cheapest console already, they don't need to be cheaper-er.
2. They're gearing up for a huge launch (Natal), there's no need to drop the price.

I really don't see this happening.