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Microsoft whacks $100 off the price of Xbox 360 Elite [Updated]

August 27, 2009 |  1:00 am

Console Sales Data

The console price war is heating up as prices start heading down. Microsoft today said it will slash $100 off the price of its Xbox 360 Elite game console and is phasing out its Xbox 360 Pro console.

To help clear inventory for the discontinued Pro version, Microsoft will lop off $50 for the console, to $249 from $299 until retailers run out. Its Xbox 360 Arcade version, which does not have a built-in hard drive, remains at $199. The lower prices will take effect Friday.

The move comes two weeks after Sony lowered the price of its PlayStation 3 console to $299 from $399. To promote the PS3, Sony is waging a marketing campaign to reposition the console as more of an all-in-one entertainment device that can play Blu-ray DVDs.

Microsoft has sold more than 30 million Xbox 360s worldwide since it introduced the second-generation game console in November 2005. Sony has sold 24 million PS3 consoles, while Nintendo Co. has moved roughly 52 million Wii consoles. Both Nintendo and Sony launched their devices in November 2006, a year after the Xbox 360 came out. Of the three hardware manufacturers, only Nintendo has not cut the price tag for its Wii, which continues to sell for $249.

"The pricing puts pressure on the Nintendo Wii and could force Nintendo to lower their price to $199," said Jesse Divnich, director of analyst services at Electronic Entertainment Design and Research, a consulting firm in Carlsbad, Calif.

Though the Wii is the current dominant platform, Divnich said efforts by Microsoft and Sony to beef up their catalog of casual, downloadable games could eventually woo buyers away from Nintendo, which has seen sales of the Wii slip in recent months.

Who will win this price war? Consumers. Though prices are unlikely to drift much below $200 in the coming years, Divnich said, manufacturers will start pumping up features to give players more bang for their buck.

Updated 8/27/09, 10:15 a.m.: This post has been updated to reflect the launch dates of each console.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

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