Microsoft has cut the price of the Xbox 360, ending months of idle speculation. The Premium SKU’s price drops by $50 to $350, the Core by $20 to $280 and the Elite by $30 to $450. All price cuts go into effect tomorrow, August 8.

For once, a rumor turned out to be true. The Circuit City ads that Peter mentioned were spot-on, accurately predicting the official price cut.

As for why Redmond decided to slash the price of the system, it’s as you’d expect: Holidays approaching, want to reach new (read: less affluent) audiences, etc. Never mind that it puts Sony in the awkward position of having the most expensive console out there.

Picture an uninformed mother walking into a Best Buy or Wal-Mart: Do I buy my son a $500 system, a $350 system or a $250 system?

I remember the days when my father, feeling guilty about being at work all day, would buy me all of the currently available systems. Better times.

Microsoft to cut price of Xbox 360 console [Reuters]