DigiTimes has reignited the Xbox 360 price cut rumors, claiming that Microsoft has lowered production costs and will reduce the price of the premium system US$100. The report comes out of Taiwan, where some 360 components are manufactured. Microsoft has denied the report, as it has done each time a 360 price cut rumor surfaces.

Many expect Microsoft to drop the price to further undercut Sony's US$600 PlayStation 3 and more closely compete with Nintendo's Wii, which will debut for no more that US$250. Despite the constant rumor denial, it's possible that Nintendo is waiting to announce Wii's price until it's sure that Microsoft will not lower 360's price. Likewise, Microsoft may be waiting for Nintendo to announce Wii's price before deciding on a possible price cut.

Microsoft sells 360 at a loss, as console makers often do at launch. The company hopes to eventually turn a profit on console sales, but Microsoft continues to sell the original Xbox at a loss. Microsoft's Home & Entertainment division, the Xbox brand's branch, reported operating loses of $1.2 billion in fiscal year 2006.

Source: Seattle Post Intelligencer, DigiTimes