Microsoft is cutting the price of its Xbox 360 video games console in the UK, ramping up the pressure on Sony’s rival PlayStation 3.

From Friday, the price for the 20 gigabyte hard-drive model of the Xbox 360 will be cut by £30 to £250. The basic Xbox 360 Core console, which does not have a hard drive, will be reduced by £20 to £180.

Microsoft also announced the European release of the higher-specification Xbox Elite, which will come with a 120 gigabyte hard drive, designed to encourage users to store content downloaded from Xbox LIVE Marketplace, Microsoft’s online games store. The Elite will cost £300, compared with the 60 gigabyte version of the PlayStation 3, which costs £399 but comes with two games.

Microsoft will hope that the discounts breathe life into the flagging Xbox 360. The console has suffered reliability problems, which cost the company about $1 billion (£500 million) in extended warranty liabilities. Last month, Microsoft also revealed that it had failed to reach its target of selling 12 million Xbox 360s by the end of its financial year, to June 30. It sold 11.6 million units.

This month, Microsoft cut the price of the basic Xbox 360 model in the United States, which comes without a hard drive, by $20 to $279. The Xbox 360 Elite was reduced by $50 to $449, again undercutting the 60-gigabyte PS3.

Sony cut the American price of the 60-gigabyte PS3 to $499, from $599, in early July. Shortly afterwards, it said that it would phase out the model, leading some gamers to dismiss the move as a “clearance sale” rather than a proper discount.

Microsoft’s price cut will still leave Nintendo’s Wii console as the cheapest in the field. The Wii costs about £180 in Britain and about $250 in America, where it has sold out consistently in many areas since its launch last year. It is outselling the PS3 and the Xbox 360 by at least two-to-one.

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