TechRadar was the first to confirm the new Xbox 360 price cuts last week, with the official press release dropping into journalist's in-boxes this morning.
The price-drop is "an aggressive but not unexpected move by Microsoft," claims journalist Steve Boxer.
"Sony, which has repeatedly said that it will not drop the price of the PS3 in the near future, is worried by Microsoft's move, as the PS3's high price has been an issue for consumers throughout its existence.
"Microsoft is clearly also hoping to snare consumers who have been introduced to gaming by the Wii and now crave more grown-up gaming experiences. But it will be interesting to see how Sony responds, given the burgeoning credit-crunch."