Microsoft announced Monday that it will slash the price of its Xbox 360 video game console in Japan by almost 30 percent to try to boost sales amid tough competition from rivals Sony and Nintendo.
The US software giant will cut the price of its cheapest Xbox 360 Arcade model to 19,800 yen (182 dollars) from September 11, down from 27,800 yen, undercutting Nintendo's Wii which has a price tag of 25,000 yen.
Microsoft's consoles have struggled to make inroads into game-loving Japan, where the market has long been dominated by domestic makers Sony and Nintendo.
"Some analysts have already written us off, but that is not so," Microsoft official Takashi Sensui told a press conference.
The Japanese video game market was "in the eye of the storm," he said.
The company will also lower the price of the high-end Xbox 360 Elite by 17 percent to 39,800 yen and release a new console with a 60-gigabyte hard drive at 29,800 yen.
Microsoft plans to introduce nearly 100 new game titles by spring 2009 including the latest installments in Capcom's blockbuster series "Grand Theft Auto" and "Street Fighter."
It will also update the Xbox live service adding new features as part of its efforts to increase its online gaming community.
Analysts say the first Xbox flopped here in part due to a lack of games that appealed to local tastes.
The Xbox 360, however, outsold Sony's PlayStation 3 in Japan for the first time in the week ended August 10, helped by the popularity of the new role-playing game "Tales of Vesperia," according to one survey.
Both consoles still lag behind Nintendo's easy-to-use Wii, which has proven a hit in Japan and many other countries, even with people who are not normally players of video games.
Sony has cut the price of the PS3 twice in Japan as it tries to catch up with the Wii.