Microsoft announced yesterday that beginning today, the Xbox 360 Elite has officially dropped in price from $399.99 to $299.99.  The Xbox 360 Pro has also dropped to $249.99, a drop of $50, while the Xbox 360 Arcade remains the low-end entry point at $199.99.  The Pro is only priced less "while supplies last" and will be phased out much like Sony is phasing out current PS3 models.

"With the holiday season right around the corner, it's already time to start looking for entertainment and gifts that everyone will enjoy," said Shane Kim, corporate vice president of strategy and business development for the Interactive Entertainment Business at Microsoft Corp. "If you're looking for deep experiences that don't require deep pockets, now is the time to purchase an Xbox 360. We've got the best games, a vast library of TV shows and movies, new music experiences, more ways to connect friends and family, and so much more on the horizon including 'Project Natal'—no controller required."

Although Microsoft would probably never admit it, the move can be seen as a direct response to Sony's announcement of the PS3 Slim, and price drop on existing PS3 models.  The newly-priced Elite sports the same size hard drive, and is priced the same, as Sony's PS3 Slim.  Microsoft is also no longer including an HDMI cable with the unit, instead opting to bundle component cables instead.  When it's all said and done, Sony will have one PS3 SKU on the market (the PS3

Will Nintendo make a move before this holiday season?