Recent rumours that Microsoft is planning a significant Xbox 360 price cut gained ground this week with the bottom-of-the-range Xbox 360 Arcade Model rumoured to be dropping to just $199 (£100) in the US next month.

VGChartz.com claims the news is bang on the money. It has posted a screengrab from a retail SKU inquiry on the 360 to back up its claim, which suggests the $199 Xbox 360 price will take effect on September 7.

"Microsoft has been no stranger to the $199.99 price point," says the report.

"In interviews, high brass officials from Microsoft have stated they are 'very aware' that the $199.99 is the sweet spot for console sales."

Pro and Elite costs to fall

Reliable news source Ars Technica also claims that there are more cuts on the way for the Pro (60GB, $299/ £150) and Elite (120GB, $399/ £200) models of Microsoft's console.

"The scheduling of the drop is telling as well. It takes place one week after Square Enix's 'Infinite Undiscovery' and two weeks before Harmonix/EA's 'Rock Band 2' take place. Recent rumours that Microsoft is planning a significant Xbox 360 price cut gained ground this week with the bottom-of-the-range Xbox 360 Arcade Model rumoured to be dropping to just $199 (£100) in the US next month. Both exclusive to the Xbox 360," adds VGChartz.

TechRadar has contacted Microsoft's UK office today for further comment.