Microsoft slashes Xbox price again

Microsoft has slashed the price of its Xbox games console by 20 per cent in Europe, bringing it below the cost of rival offerings from Sony and Nintendo.

Effective immediately the price of the Xbox will be £129.99 in the UK and €199.99 elsewhere in Europe. It is the third price cut since the console's release.

The aim is to give the Xbox more muscle to compete with Sony's market leading PlayStation 2, and more of an edge over Nintendo's Gamecube, which it narrowly outsells.

Peter Moore, corporate vice president, worldwide retail sales and marketing, home and entertainment division, at Microsoft, said: "We had a great Christmas and firmly established ourselves as the number-two console player in this region.

"We outsold some very long-established competition and enjoyed near sell-out status, gaining market share along the way.

"This price change shows that we are not content to rest on our laurels. We will continue to be aggressive in building on this momentum throughout the year."

But although Microsoft is claiming to be on track to sell eight million units worldwide, analysts predict that the company will still fall short of its nine million unit forecast by the end of June, according to financial news website The Street.