SAN FRANCISCO - Microsoft is cutting the prices of its Xbox 360 consoles as it battles with Sony and Nintendo for devotees in the multi-billion-dollar video game market.

Microsoft said that effective Wednesday it will trim US$50 from the price of Xbox 360 models in the United States.

The most basic version of the video game console will cost US$350 and its top-of-the-line Xbox 360 Elite will have a US$450 price tag, according to the Redmond, Washington-based firm.

Microsoft announced the prices of Xbox consoles in Canada will be reduced 100 Canadian dollars and that price cuts will be announced in other countries.

Microsoft's new-generation video game console had the advantage of being released a year before Sony's PlayStation 3 and Nintendo's Wii debuted in November of last year.

The Xbox 360 reputation was tarnished by a design defect that Microsoft says it has fixed.

Microsoft set aside a billion dollars in its most recent fiscal quarter to repair or replace flawed consoles.

Meanwhile, Wii systems with their group-oriented games and motion-sensing controllers have proven so popular they sell as quickly as they are made.

Sales of PlayStation 3, however, have been sluggish due to its hefty price and a dearth of must-have exclusive game software for the consoles.

"Halo," the world's best selling video game, and the hot music game "Guitar Hero" are exclusive Xbox titles.

Sony recently cut PS3 prices in North America and Japan in an effort to invigorate its sales in the face of fierce competition from the Wii and Xbox 360.

Sony's price for a PS3 with a 60 gigabyte hard drive was dropped to US$499 in the United States and it introduced an 80-gigabyte model with a US$599 price tag.

Wii consoles are priced at US$250 in the United States. - AFP/ir