Microsoft is cutting the price of its Xbox 360 video game console in Europe, weeks after doing the same in the US.
Microsoft is looking to stimulate demand
From 24 August, the 20 gigabyte hard drive model will cost 349.99 euros in the eurozone, 50 euros less than now.
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 is also facing stiff competition from Sony, which cut the price of its Playstation 3 last month.
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.
Microsoft said the price cuts would "open the door" to more customers, expanding demand beyond the console's core target market of young men.
Earlier this month, Microsoft cut Xbox prices in the US by 13%, reacting to Sony's 17% reduction in the price of its PlayStation 3 console.
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.
By the end of June it had notched up US sales of 5.6 million units, against 2.8 million Wii sold and 1.4 million PS3.
However, Microsoft has yet to make a profit on the console business it launched in 2001.