Microsoft is planning an assault on the European games console market in an aggressive price cutting plan for its Xbox machine.
The price cuts will increase the losses the software giant generates on each console it sells.
It will also increase pressure on rivals Sony and particularly Nintendo, which this week announced a profits warning because of disappointing sales of its GameCube machine.
Pride reductions in the US and Asia from the three competitors now look more likely.
Many software companies had expressed hopes that such cuts would be announced before the E3 games show in Los Angeles in the middle of next month.
The price reductions would help software sales, helping hard-pressed software publishers the majority of whom had disappointing Christmas period.
Agencies
