NEW YORK (CNN/Money) - Heard the rumor about the upcoming $50 price cuts for the Xbox, PlayStation 2 and GameCube? Forget it.

While whispers of a price cut are spreading like wildfire across the Internet, representatives of all three companies stringently deny that any such plans are in the works.

The PS2 will still cost $199...

So how did it all of this get started? It looks like speculation run amok. Earlier this week, Sony announced a 20 percent cut in wholesale prices of PlayStation 2 units in the Japanese marketplace, according to John Taylor, managing director and analyst for Arcadia Investment Corp.

The company also announced a bundle pack in Japan, combining the PS2 with a couple of games without raising the machine's retail price. At the same time, Microsoft rolled out a bundle package for the Xbox in the U.K., offering the console and four games for £199. Some interpreted these moves to mean a price cut was imminent in the U.S. Voila! A rumor is born.

Xbox will stay at $199...

If you're skeptical of the corporate denials, there are plenty of other good reasons this probably won't be happening. Most significant of these is the timing.

For traditionalists the holiday shopping season officially kicks off next Friday. The rest of us have already been hitting the malls, since there are six fewer days between Thanksgiving and Christmas this year. If Sony (SNE: Research, Estimates), Microsoft (MSFT: Research, Estimates) and Nintendo were going to try to boost sales via a price cut, they would have announced those several weeks ago and seen an immediate spike. At the very least, they would have quietly leaked the news to alert consumers and build up demand (as they did in May, when the Xbox and PS2 dropped from $299 to $199 and the GameCube fell from $199 to $149). And you definitely wouldn't have seen bundles from Microsoft and Nintendo hit the U.S. retail market.

and the GameCube isn't going below $150 - yet.

Sales of console machines are already expected to be quite healthy this holiday season. And when you're in a position of strength like that, there's no reason to dilute your power base. In other words, consoles are going to be hot items this year no matter what, so why lower the price?

Granted, a price cut would expand the distribution base and boost software sales. And software sales are where the money is at in the game industry. (Microsoft and Sony both lose money on the sale of their console hardware. Nintendo breaks even, roughly. But all three companies collect a licensing fee on every copy of every game sold for that machine.) But a price reduction coming so soon after the last one would send one of two messages: Fear or obsolescence.

Fear should be self-explanatory. A $50 cut would signal to some that the company's not confident it will reach its sales projections. (Look no further than the PC industry for proof of that.) That would tend to irritate investors, who would perhaps punish the company's stock.

By obsolescence, I mean that a $100 price reduction in just seven months might be interpreted (whether rightly or wrongly) as meaning the next "next generation" platform is coming out earlier than expected. That would only be the case for the first company to announce cuts, by the way. The other companies wouldn't send that message, as they would be seen as simply staying competitive.

It's a fun rumor – and one I'm sure plenty of shoppers wish was true. But the chances of such a significant price reduction happening are about as likely as Bob Cratchit getting corporate matching on his 401(k).  

Morris is Director of Content Development for CNN/Money. Click here to send him an email.