By Jim Reed
Newsbeat technology reporter
The price cut follows similar moves in America and Japan
Microsoft has cut the price of the Xbox 360 as it tries to reposition the console as a mass-market competitor to the Wii.
The £30 price cut means the standard 60 GB model will sell for £169.99, the same price as Nintendo's machine.
The lower spec Arcade console without a hard drive will sell for £129 while the Xbox 360 Elite, aimed at hardcore gamers, will cost £229.99.
The price cut follows similar moves in America and Japan.
Microsoft has targeted traditional male gamers with the XBox 360 console and its range of first-person shooter titles like Halo 3.
But it has been overtaken by Nintendo and the runaway success of the Wii, which is designed to appeal to a more family friendly audience.
According to the latest sales figures from research company VG Chartz, the Wii is now the market leader in the UK with 3.7 mn consoles shipped against 2.5 mn for the Xbox 360 and 1.5 mn for the PS3.
It is thought a fifth of all Wii customers have never bought a console before.
Microsoft recently announced a range of family-friendly titles as it tries to grab some of Nintendo's casual audience over the key Christmas season.
As well as new editions of Rockband and Guitar Hero, Xbox 360 will now have its own Karaoke game - Lips.
The Xbox menu system will also get a new look designed to appeal to mainstream gamers.
Microsoft said that sales of the Xbox 360 doubled in the US in the weekend after the cut, with some retailers reporting a six fold increase.