You won't read this until the morning papers, but Microsoft have announced that they are slashing the price of Xbox in America and Japan.

The console will be cut by 33% in America to $199 (about 135), matching Sony's PS2 which received a price cut yesterday. Japanese gamers will be able to get their Xbox's for just under 30% less, at the new price of 24,800 yen ($193).

Microsoft were planning to announce the price cut next week at the E3 Expo in Los Angeles, however after Sony's move yesterday to cut the PS2 from $299 to $199, Microsoft followed suit, doing exactly the same with their machine.

The price cut takes effect immediately in America, and on May 22nd in Japan. Will a price cut for Nintendo's Gamecube follow in America? As soon as we hear anything, we'll let you know.

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