This summer saw a spate of rumors which had Microsoft slashing prices of all three Xbox 360 models starting September 7. In a week, North American gamers will know whether those rumors were true, although they have been apparently confirmed by leaked scans of retail flyers.

Today, at a Tokyo media event, Microsoft announced that it is slashing the prices of all three of its Xbox 360 models…in Japan. Starting on September 11, the 120GB Elite will go from ¥47,800 (about $441) to 39,800 ($368) and the newly 60GB Pro will go on sale for ¥29,800 ($275)--¥5,000 ($46) less than its 20GB predecessor.

Most significantly, however, is the price cut of the hard drive-free Xbox 360 Arcade, which will see a drastic drop from ¥27,800 ($257) to ¥19,800 ($183). Besides becoming the first of the current-generation consoles to break the psychological ¥20,000 ($185) barrier, it will also undercut the Nintendo Wii’s ¥25,000 ($231) cost by ¥5,200 ($48). The standard-issue 80GB PlayStation 3 costs PlayStation 3 for ¥39,800 ($368) in Japan.

Microsoft’s move comes after a largely unsuccessful near-two-year courtship of the Japanese market. Despite enlisting such high-profile Japanese developers as Q Entertainment founder Tetsuya Mizuguchi and Final Fantasy creator Hironobu Sakaguchi to make exclusives, the 360 has lagged far behind the Wii and the PS3 in terms of sales.

However, the August 7 release of Namco Bandai’s 360-exclusive role-playing game Tales of Vesperia caused the system to sell out last month, according to a (translated) Microsoft Japan announcement. Microsoft also convinced Square Enix to develop several 360 JRPGs, including the exclusive Infinite Undiscovery, and to make the formerly PS3-only Final Fantasy XIII multiplatform.

Does the Japan announcement mean North American and possibly European price cuts are in the cards? Inquiries to Microsoft’s PR agency were not returned as of press time, most likely due to the federal Labor Day holiday in the US.

By Tor Thorsen