Microsoft is cutting the European price for its Xbox 360 video game console by €50 to €359.99 after a similar cut in the United States.
The company said today that the lower price for the Xbox model with a 20 gigabyte hard drive would be effective from August 24th.
It also plans to unveil a new model, the Xbox 360 Elite, that will ship with a 120 gigabyte hard disk and cost €459.99.
The European price of the entry-level model Xbox 360 Core, which does not include a hard drive, will be cut by €20 to €279.99.
Earlier this month, Microsoft announced a price cut by about 13 per cent for its main Xbox 360 model in the United States, hoping to boost sales ahead of the crucial holiday season.
Microsoft reduced the US price of the Xbox 360 Premium model by $50 to $350.
Sony had previously cut the price of its PlayStation 3 machine by 17 per cent to $500. Faced with unexpectedly strong competition from Nintendo's cheaper Wii console, Microsoft is aiming at expanding the appeal of the Xbox 360 to an audience outside its core fan base of young men.
By the end of June, Microsoft had sold 5.6 million Xbox 360s in the United States, compared with 2.8 million Wiis and 1.4 million PS3s.