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  Microsoft Uphill Battle Gets Steeper
Time: 16:05 EST/21:05 GMT | News Source: Associated Press | Posted By: Alex Harris

A battle of the giants has erupted on Japanese screens. Not between helmeted samurai warriors fighting on disks but between the corporate megaliths who created such globally popular video games and are now slashing prices. A feverish week of price slashing by the battling video game makers has left Microsoft Corp's newly launched Xbox the cheapest new-generation console in Japan, but analysts say the advantage remains with arch-rival Sony Corp's PlayStation 2.

And that advantage travels beyond Japan and into the world's biggest market -- the United States. While Microsoft, Sony and Nintendo Ltd had all been expected to announce price cuts as competition heats up in the home game machine market, Sony beat its rivals to the punch this week. The entertainment and electronics conglomerate, which relied on PlayStation 2 for the bulk of its operating profits in the business year to March 31, said on Tuesday it would slash the U.S. price of the PlayStation 2 by one-third, to $199.

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