From 24 August, the 20 gigabyte hard drive model will cost 349.99 euros in the eurozone, 50 euros less than now.
In the UK, the price will fall by £30 to £249.99 as Xbox bids to win over family users attracted to the Nintendo Wii with its motion-sensitive controls.
Microsoft is also facing stiff competition from Sony, which cut the price of its Playstation 3 last month.
Microsoft also revealed plans to launch a larger, 120 gigabyte model, the Xbox Elite, costing 449.99 euros in the eurozone or £299.99 in UK shops.
And the price of the less advanced 360 core model, without a hard drive, will fall by 20 euros to 279.99 euros or by £20 to £179.99.
Microsoft said the price cuts would "open the door" to more customers, expanding demand beyond the console's core target market of young men.
European Xbox 360 gets 50EUR price cut
Posted on Tuesday, Aug 21 2007 @ 00:05 CEST by Thomas De Maesschalck