Microsoft cuts Xbox 360 prices in Europe

Copies of the Xbox 360 video game ''Halo 3'' sit on display after it went on sale in New York September 25, 2007. Microsoft Corp cut the prices of its Xbox 360 video game console in Europe on Monday, a move intended to spur sales in a key battleground in the fast-growing industry.

SAN FRANCISCO (Reuters) - Microsoft Corp (MSFT.O) cut the prices of its Xbox 360 video game console in Europe by up to 28 percent on Monday to try to spur sales in a key battleground in the fast-growing industry.

The 80-euro decrease results in cuts of 18 percent to 28 percent across the three Xbox 360 models, bringing the cheapest Arcade version to 200 euros ($307) and the high-end Elite to 370 euros ($568).

Prices reductions in Britain range from 20 pounds to 50 pounds.

"Xbox 360 is now mass market in Europe," Chris Lewis, vice president of Microsoft's interactive entertainment business in Europe, said in a statement.

The reductions come as Sony Corp's (6758.T) PlayStation 3 appears set to capitalize on the company's recent victory in the high-definition DVD battle and on a slew of highly anticipated new games hitting the market this year.

"The PS3 has gained some momentum recently," Kaufman Bros analyst Todd Mitchell said, "and I think as you go into this summer before the fall, Microsoft has got to do what they can to shore up sales."

This was the second price cut for the Xbox in Europe in less than a year. Last August, Microsoft shaved 7 percent off the euro price of its low-end model and 13 percent off the main Premium model.

"The tide is kind of turning against the Xbox 360, so Microsoft has to be as aggressive as possible," Mitchell said.

The PlayStation brand has long dominated the European console market, although the PS3 has struggled to win fans due to its high price and lack of must-have games.

Last October, in an effort to kick-start sales, Sony introduced a cheaper PS3 model in Europe for 400 euros and cut prices on a high-end version to 500 euros.

Meanwhile, Nintendo Co Ltd (7974.OS) is winning customers with its Wii machine that sports unique motion-sensing controls and games that are easier to learn.

(Reporting by Scott Hillis; editing by John Wallace and Lisa Von Ahn)