With an eye on the upcoming holiday shopping season, Microsoft on Monday said it would bundle two video games with the Xbox 360, a move that followed by two months price cuts for the video-game console.
By the end of the month, Xbox 360 and Xbox 360 Elite are expected to ship with Forza Motorsport 2 and Marvel Ultimate Alliance. The games have a combined retail price of $90, according to Microsoft.
Microsoft in August lowered the price of the consoles by $50 in an effort to keep pace with similar moves by rival Sony, which sells the PlayStation 3. The 20-Gbyte Xbox 360 now sells for $350. The 120-Gbyte Elite system retails for $450.
The U.S. price cuts followed Sony's decision in July to lower the 60-Gbyte version of the PlayStation 3 to $499 from $599.
While hardware pricing is important, games are the driving force behind consumers' choice of video-game console. Among the most popular games on the Xbox is Microsoft's sci-fi game Halo 3, which posted sales of more than $300 million in its first week on the market. Released Sept. 25, first day sales of Halo reached $170 million, and retailers took more than 1.7 million pre-orders -- both industry records.
Nevertheless, Nintendo's Wii has outpaced sales of the Xbox 360 and PlayStation 3. Nintendo in June sold 381,800 Wii consoles, compared with Sony's 98,500 PlayStation 3 and Microsoft's 198,400 Xbox 360 machines.
The holiday shopping season, which officially begins the Friday after Thanksgiving and runs to Christmas, is the biggest retail season of the year, and a time when Microsoft and its rivals make major marketing pushes for their consoles.