Microsoft said Monday it would lower the estimated retail price for the Xbox 360 in Europe and would introduce an Elite version of the video game console.

As of Friday, the price of an Xbox 360 with a 20-Gbyte hard drive and one wireless controller would be cut by 50 euros ($67) to 350 euros ($472). The price for the entry-level Xbox 360 Core console was reduced 20 euros ($27) to 280 euros ($377).

Also on Friday, Microsoft planned to launch in Europe the Xbox 360 Elite, which will have a 120-Gbyte hard drive. The console also includes a high-definition multimedia interface port for connecting the device to a digital TV. The Elite will carry an estimated retail price of 450 euros ($607).

The price cuts reflect the intense competition in the video game market. Sony in July lowered the price of its PlayStation 3 console and revised its European offering. Microsoft and Sony also compete against Nintendo, which sells the Wii. The console, which sports wireless controllers, is the fastest selling of the three. Its popularity has been attributed to its relative low price and motion-sensing remote control that lets users get more involved in games such as golf or tennis.

Earlier this month, Microsoft lowered the price of the Xbox 360 in the United States. The 20-Gbyte version of the Xbox 360 now carries a $350 price tag, and the basic Core system will sell for $280, representing $50 price cuts for both models. The high-end, 120-Gbyte Xbox 360 Elite system will retail for $450 in the United States -- a $30 reduction.

Sony in July cut the price of its 60-Gbyte PlayStation 3 by $100, to $499. The Japanese electronics maker also introduced an 80-Gbyte version priced at $599. To date, Nintendo has held firm on pricing for its Wii video game system.

(1 euro = $1.34)