Microsoft said today it was cutting the price of its Xbox game console by a third in the United States and Canada and by 29 per cent in Japan.
The discount is the latest salvo in a price war between console makers jostling for share in the $20 billion global video game market.
In a related cost-saving move, Microsoft said it will shift Xbox production to Doumen, China, near Hong Kong, from Hungary by July or August. It will maintain a facility in Gudalajara, Mexico.
The Xbox price cut, to $199 from $299 in the United States immediately and to 24,800 yen ($193.12) from 34,800 yen ($271) in Japan effective May 22nd, comes two days after Sony said it would cut the US price of its market-leading PlayStation 2, which came out a year before Xbox, to $199.
Sony also said this week it would allow retailers to begin discounting in Japan.
The Xbox was unleashed last November in a marketing blitz, but international sales have faltered for Microsoft, which has been prepared to lose money on console sales to make it back in game software by building a big base of users.
Microsoft announced a deep price cut for the Xbox in Europe last month, a discount the company said had revived demand for the green-and-black machines.
