Cheaper Xbox begins to catch up

After a disastrous start that saw Microsoft wipe £100 off the asking price of its Xbox just six weeks after launch, sales of the console are finally closing in on Sony's PlayStation 2.

But despite the £199 price tag, the benefits of a multimillion pound launch and more features, sales still marginally lagged behind those of the two-year-old Sony device in the week following the industry's quickest ever price drop, according to market watcher Charttrack.

Xbox has a built-in hard drive, a broadband adapter and more graphics processing power than the PlayStation 2, but far fewer games.

It also lacks the Sony console's ability to allow gamers to play their back catalogue of PlayStation games on the newer machine.

"Our customers have reacted positively to the price drop and we have seen an uplift in sales since 26 April," said Alex Croft, head of buying at the Game chain of video games stores.

Microsoft is putting a brave face on its failure to become the UK's best seller in the week following its price cut.

Sandy Duncan, vice president of Xbox Europe, said: "As we've said before, this is a marathon, not a sprint, and these initial figures are extremely encouraging.

"The increased Xbox sales since the price reduction indicate that the strategy is on track. The new price allows us to be more competitive and make serious inroads into the hearts of European gamers leading up to Christmas 2002."

As well as battling against PlayStation 2, Microsoft now faces competition from Nintendo's new console, the GameCube.

The Japanese firm has savagely undercut both the PlayStation 2 and Xbox, launching at just £129, and claims to have sold 75,000 consoles in the first two days following its UK launch last week.