Microsoft has slashed the UK price of its Xbox console by £100 in an effort to compete with Sony's PlayStation 2.
As a result, the UK will see prices drop from £299 to £199, matching the PlayStation 2.
Although the Xbox launched to an eager market in March, there have been reports of sluggish sales. Despite a $500m marketing campaign, the console took off well in the US but sales are reported to have been disappointing in Europe and Japan.
The price cuts will come into effect on 26 April, just one week before Nintendo launches its GameCube offering with a price tag of £150.
But some analysts have said that Microsoft will still have a tough battle on its hands. Sony has already sold 30 million PlayStation units worldwide. Xbox sales so far are estimated at just 2.5 million.
Microsoft had to recall some units when it first launched after customers complained that game discs were being damaged by the machine.
There are also reports that the software giant has been under pressure from games publishers and console retailers to drop the price of the Xbox.
Those who bought the console at full price have been promised a "thank you" package from the company.
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