Xbox Picks Up PS3's Gauntlet

Back to school time is upon us, but it's not just students who will soon be facing homework. Thanks to Thursday's announcement that Microsoft (Nasdaq: MSFT) is cutting the price of its high-end Xbox 360 Elite video game console from US$399 to $299 -- matching that of Sony's (NYSE: SNE) new PlayStation 3 Slim -- consumers will have to study up on which console now better fits their affordable entertainment needs in a down economy.

"It's never been a better time to be a gamer," gaming guide author and consultant David Hodgson told the E-Commerce Times. "I think you're finally seeing a price point that is going to attract a huge mass-market buy. I think you've got the battle lines drawn. But it's going to be a tricky decision on which console to buy."

Microsoft clouded that decision-making process further by trimming the price of the Xbox 360 Pro -- with a 60 GB hard drive -- from $299 to $249, the same price as Nintendo's best-selling Wii console. Microsoft will sell the Pro while supplies last and then will discontinue the model. There are no changes to the cheapest Xbox 360, the Arcade; it remains at $199.

The move confirms reports on some gaming blogs of fliers advertising weekend price cuts coming for the Elite.