Today, making a major follow-up to its recent slashing of the price of Xbox 360 models in Japan, Mcrosoft went one step further and announced that starting this Friday, September 5^th, the price of all Xbox 360 models will be cut, leaving the cheapest model, the Xbox 360 Arcade, priced at a tantalizing $199 USD/CAD.

Microsoft says that history shows over 75% of all console sales happen after a unit's price falls below the $200 mark. If that's correct, we could begin seeing the sales of the Xbox 360 Arcade taking a massive leap, but what about the other models? The Xbox 360 Premium/Pro will now be priced at $299 USD/CAD while the Xbox 360 Elite will go for $399 USD/CAD. If the company's history is correct, that means the most popular Xbox 360 model, the Premium/Pro, which is picked most often because of its “total package” bundling, would only be slightly more appealing.

Either way, this puts the Xbox 360 Elite in a very competitive position against the Playstation 3, as the lowest/only current model of the Playstation 3, the 80GB model, costs $399 USD/CAD, and the Xbox 360 Elite is the “top of the line” Xbox 360 model, and the new 80GB is not backwards compatible with Playstation 2 or original Playstation software. Even with rumours still circling about a new 120GB PS3, the likelihood is that it would cost $499 USD/CAD at this point, so, as far as pricing goes, Microsoft has quite the advantage. If only it could get the reliability thing down.