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Even before E3 has started, Microsoft has done what has been rumored for some time, and announced a price drop for the Xbox 360.

The 20GB ’standard’ pack will now be $50 less, coming in at $299, making the 360 edge ever closer to the price of the Wii. But this wasn’t all the news that Microsoft announced today, a new 360 package will be used to phase out the 20GB model, taking a tactic that Sony used last year with the 40GB PS3.

The 60GB 360 will cost the same as the older model cost before the price drop, meaning that for $50 more, you can get 40GB more storage, a good deal to be fair. The hard drive is the only change for this package, although we can expect to see a game thrown in for free when it comes to retail following E3.

For the full press release hit the jump. And stay with Nukoda tomorrow for info on the company’s Keynote Speech, as it happens.

REDMOND, Wash. — July 13, 2008 — Microsoft Corp. is giving consumers more gigabytes for their buck. The company today announced an Xbox 360 console with triple the storage space of the original console, but for the same price of $349 (U.S.) estimated retail price (ERP).

Available in retail stores in the U.S. and Canada starting in early August, the upgraded Xbox 360 will include a 60GB hard drive for storing the growing wealth of digital entertainment available for the console, including music, movies, television shows and game content. In addition, Microsoft today dropped the price of its 20GB Xbox 360 console in the U.S. and Canada to just $299 (U.S.) (ERP) while supplies last, a savings of $50.

“We know consumers need more and more space to store the amazing digital content Xbox 360 offers, and we’re giving it to them at no extra charge,” said Albert Penello, Xbox director of product management at Microsoft. “No one device offers the depth and breadth of entertainment that Xbox 360 can deliver, and now you’ll have three times the storage to manage all that great content.”

Xbox 360 is just one of three Xbox 360 gaming and entertainment systems Microsoft offers. Microsoft’s Xbox 360 Arcade, which comes with a 256MB memory unit and five Xbox LIVE Arcade games, is a value for the whole family for $279 (U.S.) (ERP), and the premium Xbox 360 Elite console is available with a 120GB hard drive for $449 (U.S.) (ERP).