LOS ANGELES (Reuters) - Microsoft Corp plans to cut the price of its best-selling Xbox 360 Pro model by US$50 (S$68), to US$299 (S$407) in the next few weeks, the Hollywood Reporter reported citing anonymous sources.

The price cut for the Xbox 360 model with the 20 gigabyte hard drive will come before the video game industry's biggest trade show, E3, taking place in Los Angeles on July 15-17, the report said.

Rumors of the Xbox price cut swirled on popular gaming blogs Joystiq and Kotaku last week. The two sites received snapshots of Kmart and Radio Shack flyers advertising the US$299 (S$407) price.

A Microsoft spokeswoman declined to comment on the report.

Microsoft last cut the price of the Xbox Pro in August, from US$399 (S$543) to US$349 (S$475), prior to the release of "Halo 3" the following month.

A cut to US$299 (S$407) would make the Xbox 360 Pro US$100 (S$136) less than one of the console's major rivals, Sony Corp's PlayStation 3 with a 40 gigabyte hard drive.

Microsoft is locked in a three-way competition with Nintendo's Wii and the PlayStation 3, which comes with a high-definition Blu-ray video player.

(Reporting by Jennifer Martinez; Editing by Daisuke Wakabayashi and Carol Bishopric)