Microsoft has reduced the price of its Xbox 360 Elite gaming console ahead of the launch of Sony's PlayStation 3 Slim.
The move could spark a new console war, as both Sony and Microsoft seek to boost sales of their gaming devices in the run-up to Christmas.
British consumers will save around £30 on the Elite console, which boasts a 120GB hard drive and access to Sky's catch-up television service, Sky Player, as well as Last.FM, Twitter and Facebook.
But Microsoft will no longer supply an HDMI cable with the console, meaning consumers will have to buy one separately if they wish to hook their console up to a television and enjoy games, movies and other content in high definition.
Microsoft has also increased the price of its entry-level Xbox 360, the Arcade, which will now cost £159.99, £30 than before the price changes. The midlevel Pro console will be discontinued once current stocks run out.
The shift in Microsoft's pricing strategy comes just days before Sony launches the latest version of its popular PlayStation 3 console. The new-look PlayStation Slim, which hits shops next week, will cost £249, less than any previous PS3 console.
"With the Christmas season right around the corner, it's another opportunity to put the customer centre stage with entertainment and games that everyone will enjoy," said Neil Thompson, a senior executive for the entertainment and devices division of Microsoft. "We have a goal over the next 18 months to deliver value with amazing content and rich interactive experiences in the living room."
Microsoft defended its decision to remove the bundled HDMI cable from its Xbox Elite consoles, saying that it was necessary "in order to offer the Xbox Elite to consumers at a reduced price".
Both Microsoft and Sony will hope that price cuts to their consoles reinvigorate the market. Recent figures suggest that sales of games and consoles have dipped this year, and have slumped around 29 per cent in the United States. Microsoft's Xbox console, though, is still enjoying strong sales in the US, up 17 per cent this year.
All Xbox 360 consoles will be compatible with Project Natal, Microsoft's innovative controller-free gaming system that was demonstrated at the E3 video games expo in June. Although no launch date for the system has been set, it is widely expected to go on sale next year, and will be backwards compatible with existing consoles.
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