Ars Technica reported this as rumor as far back as the beginning of this month, but it seems that with some actual evidence in place of hearsay, that rumor is proving to be true.  That said, the XBox 360 line will see some pretty hefty price cuts across the board starting on September 7th.  The 120GB Elite will come down to $399, the 60GB Pro to $299, and the budget priced and hard drive lacking Arcade to $199.

The most obvious impact of these cuts is that a version of the XBox 360 will now be cheaper than the top selling Nintendo Wii.  No indication of any price drop from Nintendo has hit the mainstream innerweb as of yet, so it could prove to be an interesting holiday season between them and Microsoft.  Though a fresh rumor has hit today which could make it even more interesting, indicating that the $199 machine may actually ship with the long rumored 360 motion controller.  Joystiq is reporting that this package could come with some new mini-games developed by Rare, and that the new controller would be compatible across the entire 360 product line.

So if you know of anyone in the market for the 360 in the coming weeks, do them a tremendous favor and let them know to hold off until September 7th.  Or don’t, then watch them squeal around that time.

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