Once again, the rumor mill surrounding the Xbox 360 proves its might. According to a press release Microsoft issued on Monday, Microsoft will be dropping the price on all three of their console packages, confirming the speculation surrounding the past few weeks.

The Xbox 360 core system which does not include a hard drive, will be reduced by $20 to $280, the Xbox 360 Premium will get a $50 price drop down to $350 and the new Elite model, which features a 120GB hard drive, will drop $30 to $450. The Xbox 360’s group product manager, Aaron Greenberg, said Microsoft timed the price cut to coincide with the release of Electronic Arts Inc’s “Madden NFL 08.”

With the price drop taking place right before a landslide of eagerly anticipated titles coming to the Xbox 360 this fall, it appears that Microsoft will be in a great position to boost sales in the second half of this year.

So Engadget has been spot on once again.  Last week they leaked a story about the Elite as super charged XBox 360 with a bigger hard drive, and a couple of other things.  Then today they leaked photos of said new model.  But tonight it was announced.  It will be black, it will have HDMI, and sporting a big out 120 GB Hard drive. 

• The console will come with component and composite cables, as well as an HDMI cable.  
• The console will come with a black wireless controller and black (wired) headset.
• The black controller, black rechargeable batteries, and black headset will all be available in retail for the same price as the white gear.
• Xbox Live Marketplace will also begin vending content from Paramount and Universal (and their properties).

It’s out April 29th, people. Ready for your second Xbox? No? Well, it’s still cheaper than that other black game console.

 So now for the bad news
• No built in WiFi.
• No smaller 65nm CPU.
• No shock, but no HD-DVD drive built in (and a side point they do not plan to make a black HD-DVD drive)
• For people who want the bigger drive but not the whole Elite package you are going to be paying $179.

Check out Major Nelson’s flicker account for pictures