Engadget’s Sean Hollister just re-kindled a great video game tradition: the pre-E3 price cut rumor.

A “trusted source” tells the blog that on May 15, Nintendo will drop the Wii’s price from $200 to $150. A May price cut would actually preempt E3, which starts on June 7, but could also set the stage for Playstation 3 and Xbox 360 price cuts during the trade show.

It’s been more than a year and a half since any console maker reduced prices. Nintendo cut the Wii’s price from $250 to $200 in September 2009, just after Sony slashed prices on the PS3 from $400 to $300. Microsoft cut the mid-range Xbox 360’s price to $300 in September 2008, and has only redesigned the hardware and boosted specs since then.

The console market could use a boost, too. Although revenue was up in February, the industry shrunk in 2010 according to NPD. The Wii in particular has seen its dominance challenged in the United States by the Xbox 360.

But so far, the rumor mill has been fairly quiet. Michael Pachter, the oft-quoted analyst for Wedbush Morgan, said in March that he expects an Xbox 360 price cut at E3, with the Wii and PS3 to follow, but that’s just speculation. Juicy rumors have been in short supply. With E3 less than two months away, expect that to change.

 
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