Xbox One price cut to match out-performing PlayStation 4
Microsoft is to drop the price of its new Xbox One console - just over three months after its release.
The console, currently priced in the UK at £429, with a bundled game, will drop to £399 on Friday and will include major title Titanfall in the package.
So far, the drop will only apply to the UK.
The new cost brings the console in line with the price of Sony's PlayStation 4, which is outselling Microsoft's machine.
However, the PlayStation 4 can be bought without a game for £349.
"The reason we're doing this is that we're committed to giving gamers the best value that we can," said Harvey Eagle, Xbox's marketing director in the UK.
"We're only a few months into a generation of consoles that are going to last for many many years to come," he added.
"And now just feels like the right time to make the adjustment on the price."
Industry figures suggest that the PlayStation 4 is outselling the Xbox One by around two to one, with 5.3 million of Sony's machines being sold worldwide.
However, Microsoft is keen to point out that compared with their previous console, the Xbox 360, the newer model has enjoyed a "record-breaking" launch, and that sales of games have been strong.
The new, cheaper bundle will include a copy of Titanfall - a major title that Microsoft expects will significantly drive sales of the console.
Titanfall is not out until 14 March, and so people buying consoles at the cheaper price before that date will not be able to the play the game until it is released.
In an interview with the BBC, Mr Eagle defended the price change coming so soon after the console's release - and thanked those who had bought the machine early.
"We're hugely appreciative," he said.
"We would like to thank all of the people that have supported us since launch."
The Xbox One's higher launch price was attributed in part to the inclusion of its Kinect hardware - the motion tracker that allows gamers to play without a physical controller.
However, analysts argued that while an impressive piece of technology, the Kinect does not yet offer enough innovative uses to tempt people into the extra cost.
"You've got this Kinect device that has potential to push forward what we expect a games console to do," said Nicholas Lovell, from Gamesbrief.com.
"But without the software to support it it looks like a white elephant."
Microsoft said that they regarded the console war as a "marathon" rather than a sprint - and that it was confident the added hardware would stand the Xbox One in good stead further down the line.
"We're in it for the long haul," Mr Eagle said. "Kinect is absolutely integral to Xbox One."
Microsoft's long-term strategy is to make Xbox One the "hub" of the living room - a device through which people would watch TV and other entertainment as well as play games.
But Mr Lovell had doubts - especially as ever-more-powerful tablets and smartphones put this approach under threat.
"They're skating to where the puck was, not where the puck will be," he said.