Grand Theft Auto IV didn't inspire droves of people to buy Xbox 360's as Microsoft hoped, so what's Plan B? Price cuts. Several sources are reporting that the Xbox 360 could see a significant price drop before E3 in mid-July.

The Hollywood Reporter, citing an anonymous source at a major retailer, reports that Microsoft will drop the price of the Xbox 360 Pro (the "mid-level" model with a 20 GB hard drive) from $349 to $299 sometime in the next couple weeks. The article came a day after a scanned page from an upcoming K-Mart flyer that listed the 360 Pro at $299 was posted on the High-Def Digest forums. Then, yesterday, Joystiq got its mitts on a upcoming Radio Shack ad that also lists the price cuts. It seems unlikely that all of these different sources would get the price wrong by the exact same margin.

There's no mention of the Arcade or Elite models in the Hollywood Report article or any of the leaked catalogs but presumably they would also see comparable price reductions. Oh, and here's a promising omen: Microsoft just announced they were slashing prices on all 360 models in Australia. E3's only two weeks away so we'll find out whether this rumor is bogus or not very soon. However, given the fact that the whole situation seems like a repeat of last summer, when an Xbox 360 price cut was revealed by leaked flyers and another Hollywood Reporter article, I'm willing to bet this price cut will happen.