According to Joystiq, who spoke with another source, with a K-Mart ad leaked for July 13.

A flyer from K-Mart, which first appeared on the High Def Digest forums, indicates that Microsoft will drop the price on its 20GB Xbox 360 SKU by $50, bringing it down to $299. The advertisement does not indicate a price cut on the other Xbox 360 hardware configurations, but it would seem likely to keep prices in balance (the Core/Arcade SKU for example is $279 currently, so we could foresee that dropping down to $249 to match the Wii).

A number of analysts have suggested that Microsoft and/or Sony would need to implement price cuts this summer because neither the Xbox 360 nor the PS3 are selling a lot of units – even with the blockbuster release of GTA IV. EEDAR’s Jesse Divnich recently predicted that Microsoft would announce a price cut at this year’s E3.