Gofanboy has reported that inside sources at Microsoft have stated that the much speculated Xbox 360 Slim will be revealed at this year’s E3 conference in June.

This rumour follows a recent development that the next Xbox 360 firmware update will implement USB storage functionality, as well a supposed leaked image of a new, much smaller, Xbox 360 motherboard.

Apparently, Microsoft will announce a price cut on current Xbox 360 consoles (does not specify which models) to $149 in a “liquidation” program. Once all current Xbox 360 consoles have been cleared from shelves, they will launch the Xbox 360 Slim at $199, and shortly after that it will be reduced to $149.

Of course at this stage, it is just a rumour. But just like the PS3 Slim rumours that circulated before the announcement last year, these particular rumours outline a strategy that makes sense.

Slimming down the console would reduce manufacturing and distribution costs, allowing for a retail price cut to follow. Furthermore, USB storage capabilities will give Microsoft the freedom to release a Hardrive –free Xbox 360

Slim at an extremely low price, and users could simply use a USB storage device to save and update their games.

However, I don’t see Microsoft getting rid of the harddrive all together, as USB storage would not be sufficient for those who like to install their games to disk, or download content from Xbox Live.

We will find out if there is any truth to the rumour in June, when Microsoft is supposedly scheduled to make the big announcement.

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