It’s good news for penny-pinching game lovers. Both Sony and Microsoft, developers of the Play Station and Xbox, respectively, are likely planning price cuts that will heighten competition and liven up the sagging gaming market. Ars Technica’s “inside source” claims that, in addition to the systems being available at a lower price, they will also be more powerful.

Don’t expect to go to Best Buy today and find a cheap Xbox. The price drops are not expected until this fall at the earliest. The cost-cut comes just in time for the holidays and just in time for some serious hardware upgrades for both Sony’s and Microsoft’s systems.

From the Microsoft corner, the Xbox 360 is going to receive the much-awaited standard upgrade to the ‘Elite’ model—a 120GB gaming machine that offers a few more perks than the less-powerful Xbox 360 Pro. Presently, the Xbox 360 Pro offers a 60 GB hard drive and retails for $299. The beefier Xbox 350 Elite comes with a $399 price tag, plus the roomier storage capability. If the rumors are correct, gamers can expect to purchase the sweeter Xbox at the lower price. The Pro may be phased out, giving way to the Elite as the standard Xbox.

Sony’s trick is, perhaps, a bit more exciting. Gamers have been salivating for months over the rumors of a PS3 Slim. The price cut plus the holiday season, plus a shrinking stock of PS3s (80GB version) may equal a drop in price of the 160GB PS3 and the release of PS3 Slim.

Although it’s all mere speculation at the time, the story goes something like this. If Sony keeps selling the 60GB PS3s at the rate they are currently, they will run out of them by early September. To replace them, the 160GB versions will be much more readily available. Thus, like the Xbox 360 maneuver, 160GB versions of the PS3 may become the garden variety PS3 by this fall—with a welcome price cut (maybe). To replace the phased-out 60GB model and up the ante for holiday-hungry consumers, the PS3 Slim just may make its debut (maybe).

Ars Technica’s conclusion is pretty confirmatory: “These moves all make sense: the systems are becoming less expensive to build, and hard drive space doesn’t cost much to add… although it does make a good story when you have more storage to offer consumers. With Microsoft selling entire games through Xbox Live, the Elite has become far more important.” Yet rumors are rumors, so you’ll have to keep tracking this one as real details are released.

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