LOS ANGELES - MICROSOFT plans to cut the price of its best-selling Xbox 360 Pro model by US$50 (S$68), to US$299 (S$406) in the next few weeks, the Hollywood Reporter reported citing anonymous sources.

The price cut for the Xbox 360 model with the 20 gigabyte hard drive will come before the video game industry's biggest trade show, E3, taking place in Los Angeles on July 15-17, the report said.

Rumours of the Xbox price cut swirled on popular gaming blogs Joystiq and Kotaku last week. The two sites received snapshots of Kmart and Radio Shack flyers advertising the US$299 price.

A Microsoft spokesman declined to comment on the report.

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

A cut to US$299 would make the Xbox 360 Pro US$100 less than one of the console's major rivals, Sony'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.