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In the UK, the price will fall by £30 to £249.99 as Xbox bids to win over family users attracted to the Nintendo Wii with its motion-sensitive controls.
Microsoft also revealed plans to launch a larger, 120 gigabyte model, the Xbox Elite, costing 449.99 euros in the eurozone or £299.99 in UK shops.
And the price of the less advanced 360 core model, without a hard drive, will fall by 20 euros to 279.99 euros or by £20 to £179.99.
The Xbox 360 has comfortably outsold PS3 and Nintendo's Wii console in the US, not least because it launched a year earlier than its rivals.
I don't think this is going to help too much.The Wii still undercuts them, even at the basic Xbox 360 system. Their biggest sales spike for the next 3 years is probably going to be Halo 3.