Xbox 360 price cut coming to US - starts at $199

Now Microsoft is taking a page from Wii's strategy in its battle against Nintendo and Sony (SNE) in video games. BusinessWeek has learned that Microsoft will cut prices on all three of its Xbox 360 models in the U.S. on Sept. 5, following a similar cut in Japan on Sept. 1. The latest move includes an $80 price cut on the entry-level Xbox 360 Arcade, which at $199 will be the cheapest of the current generation of consoles on the market, $50 lower than the Wii.

Microsoft is also repositioning the Xbox to make it more appealing to casual gamers. It has designed a cleaner, more intuitive way to navigate through the console, instead of the current hierarchical tabs that have a computer feel to them. The software will be downloaded to Net-connected Xbox 360s in the fall, and offered on CDs for other customers. Microsoft is also creating a new casual gaming channel on its popular Xbox Live Web site, called Primetime. There, gamers in each of four markets—North America, France, Germany, and Britain—will be able to play against one another. One of the first games: a trivia battle called 1 vs. 100, created by Deal or No Deal producer Endemol. "They're looking to get a different demographic of consumer," says Bob McKenzie, senior vice-president of video game retailer GameStop Stores. "This is really about the casual gamer."