Microsoft to cut price of Xbox 360 to $299

XBox 360 video game consoles at a Best Buy store in Bellevue, Washington November 22, 2005.

SEATTLE (Reuters) - Microsoft Corp is set to cut the price of its best-selling Xbox 360 Pro model to $299 from $349, a source briefed on the matter said on Friday.

Microsoft plans to lower the price of the Xbox 360 model with the 20 gigabyte hard drive this weekend before the video game industry's biggest trade show, E3, taking place next week in Los Angeles.

A price cut has been widely reported by popular video game blogs and technology Web sites. Many posted snapshots of flyers from various retailers advertising the $299 price.

A company spokeswoman said Microsoft has nothing to announce at this time.

Microsoft last cut the price of the Xbox Pro in August, from $399 to $349, prior to the release of "Halo 3" the following month.

A cut to $299 makes the Xbox 360 Pro $100 less than Sony Corp's PlayStation 3 with a 40 gigabyte hard drive. Microsoft is locked in a three-way competition with Nintendo's Wii and the PlayStation 3, which comes with a high-definition Blu-ray video player.

Price cuts from Nintendo and Sony seem unlikely. Nintendo's $249 Wii is still in short supply at many retailers, while Sony has said it aims to turn its video game business profitable this year, making a cut hard to swallow.

(Reporting by Daisuke Wakabayashi, editing by Richard Chang)