SAN FRANCISCO , California ( Reuters ) -- Microsoft Corp said Monday it will cut the price of its main Xbox 360 video game console model by about 13 percent in the United States , hoping to boost sales ahead of the crucial holiday season . Microsoft is aiming at expanding the appeal of the Xbox 360 to an audience outside its core fan base . The move reduces the price of the Xbox 360 Premium model by $ 50 , to $ 350 , and follows a move last month by rival Sony Corp to cut the price of its PlayStation 3 machine by 17 percent , to $ 500 . Faced with unexpectedly strong competition from Nintendo Co Ltd 's cheaper Wii console , Microsoft is aiming at expanding the appeal of the Xbox 360 to an audience outside its core fan base of young men . `` As we look to the holidays we want to bring in more gamers and lower the price for those customers , '' the Xbox 360 's group product manager , Aaron Greenberg , said in an interview . `` We 're always trying to bring down cost of the box and ... we always try to pass on the savings to our consumers . We feel like this is the right time to do it . '' The price of the Xbox 360 Core , which does not include a hard drive , will fall $ 20 to $ 280 while the Elite model , which features a 120-gigabyte drive , six times the size of the Premium 's , will fall $ 30 to $ 450 . The cuts will take effect from August 8 , Microsoft said . Launched in November 2005 , the Xbox 360 has gone 20 months without a price cut , the longest of any console in history . Sony 's PlayStation 2 held its $ 300 price for 18 months after launching in the United States in 2000 . `` It surprised me a little bit because there 's not a whole lot of market pressure on them to lower the price , '' said Van Baker , an analyst with market research firm Gartner . `` Is it going to make an enormous difference ? No , because when it comes to consoles , it 's not the price that sells the console , it 's the games that sells the console and from that perspective , Microsoft 's in pretty good shape , '' Baker said . The rising sophistication of consoles , which boast graphics performance that rivals personal computers costing several times as much , means manufacturers are more reluctant to drop prices . That 's particularly true for Microsoft , which has yet to turn a profit on the Xbox business it launched in 2001 in a bid to challenge Sony 's growing dominance in the living room . By the end of June , Microsoft had sold 5.6 million Xbox 360s in the United States , compared with 2.8 million Wiis and 1.4 million PS3s -- the latter two launched a year later . Microsoft forecasts its entertainment and devices division , home to the Xbox , Windows Mobile and Zune digital music player businesses , to turn profitable in its current fiscal year after two years of losses totaling more than $ 3 billion . The Redmond , Washington-based company has forecast revenue at the division to grow by between 10 percent and 19 percent this year from sales of $ 6.08 billion in fiscal 2007 . Greenberg said Microsoft timed the price cut to coincide with the release of Electronic Arts Inc 's `` Madden NFL 08 '' , the latest installment of the publisher 's top-selling football franchise . `` Summer tends to be seasonally slow , but we definitely see a big uptick starting with 'Madden ' , and accelerating through the end of the year , '' Greenberg said . Microsoft is also banking on the highly anticipated final episode of `` Halo '' , its flagship game franchise , to be a major profit driver this year . The game hits stores on September 25 . E-mail to a friend . Copyright 2007 Reuters . All rights reserved.This material may not be published , broadcast , rewritten , or redistributed .
Microsoft will cut the price of its Xbox 360 gaming console by about 50 % . The Xbox 360 console model will now sell for $ 350 . Microsoft timed the price cut to coincide with the release of ` ` Madden NFL 08 ''