�We are making a clear statement today � we mean business in Europe,� said Sandy Duncan, Vice President, Xbox Europe. �The phenomenally positive response to Xbox through reviews, awards and game sales has demonstrated that consumers love Xbox. We want to make sure that price is not the obstacle to the Xbox experience.�

A similar price reduction was also announced in Australia bringing the price of the system there to A$399.00.

Since its debut Xbox has been identified in head-to-head comparisons by game enthusiasts as the best gaming experience available. Xbox enjoys one of the highest attach rates of any video game console � the attach rate in the UK was 2.8 after two weeks on the market according to ChartTrack. In the US, according to NPDFunworldSM, the definitive source for toy and video games industry sales data, attach rate is 3.9, the highest of any next generation console after four months in the market.

In less than five months since its original debut in America, more than 20 games have already sold over 100,000 units each world-wide. Halo alone has already sold more than one million units world-wide, with the distinction of having achieved that mark faster than any other next generation game. It has also garnered some of the strongest European reviews ever for a video game, with publications like Edge calling it �the most important launch game for any console ever.� With this price reduction, Microsoft makes Xbox the clear choice for all customers.

�This is a long-term, strategic move that will benefit our retail partners, our third-party publishing partners and ultimately the gamer,� said Duncan. �Xbox has always been amazing value for money, and now it is even more so - we are providing the right console at the right price. The most powerful video game system on earth, and the only one with a built-in hard drive and broadband adapter, is now without a doubt the best value available. The playing field in Europe has been levelled, making it even easier for customers to enjoy the power of Xbox.�

�Xbox enjoyed a great launch in Europe � fantastic product and fantastic games,� said David Gardner, VP, Electronic Arts. �It�s great they�re making a move that will enable more customers to enjoy Xbox. Plus, this is great for publishers as our games, such as FIFA World Cup 2002 and the Xbox-exclusive Buffy the Vampire Slayer, now have the potential to reach an even wider audience in Europe.�

�This is a great move for Xbox,� said Lisa Morgan, Commercial Director, The GAME Group plc. �Xbox sales have been good but now there�s an even greater sales potential for us. We will benefit from increased hardware sales, which in turn results in increased peripheral and games sales. Feedback from our customers on Xbox has been extremely positive � if there has been one limiting factor it has been price. We�re glad Microsoft has made an aggressive move to remove the price barrier and put this fantastic console into more European homes in a quicker timeframe. This is going to benefit the industry as well as customers.�

Customers who have already purchased an Xbox at the original price will be rewarded for their early adoption with a special thank-you package. Details are posted on www.xbox.com/uk.