WinRumors is reporting that Avatar Kinect will be released on July 27. According to the site, "company insiders familiar with Microsoft's plans" have revealed that the Avatar-filled, Kinect-enabled virtual chat room will become part of Kinect Fun Labs next Wednesday.

The rumor jives with information Microsoft gave us at E3 last month, that indicated that Avatar Kinect was slated for July. There isn't much July left at this point, so next week seems like a reasonable bet. We've contacted Microsoft for confirmation.