It seems the folks over at Microsoft are considering a new tactic to compete with the PlayStation 3 when it makes its debut later this year. A price drop of about $100 is being reported by several sources on the net.

From Kotaku:

A new version of the Xbox 360 would be cheaper to manufacture and debut about a year after launch.

If they hit their targets, the Microsoft would be able to cut the costs of its console in the autumn of 2006. Microsoft would have the option of slashing the price of its console, just as rivals come out with their first consoles.

While this isn’t confirmed from Microsoft as of yet, the move would be brilliant for making the 360 appeal even more to gamers and with Halo 3 on the horizon, it might just push the 360 to the No. 1 spot in the next-generation console war when it really heats up this holiday season.