Microsoft moved to adjust Xbox 360 prices in the European market, likely in an effort to both line up its cost with other regional markets while also taking into account a weakening US dollar.

The changes are taking place in both the UK and markets where the Euro is the currency of choice. In the UK, the base Xbox 360, the Arcade, will fall to £159, down £20, the standard model to £199 from £249, and the Elite £259 from its original £299 price.

For example, the Arcade, which sells for $279 here in the US, will sell for an equivalent of $305 in Euro markets and $320 within the UK. Prior to this, the difference was more significant.

Another aspect of this price manipulation is that the Xbox becomes cheaper than the Wii, which sells for £179 in the UK and 249 euros across the rest of Europe. That could prove helpful in making the Xbox competitve against one of its biggest rivals overall.

No doubt, Nintendo will watch carefully to see how consumers respond to this latest salvo by Microsoft in the console wars. "Yes, the buyer segments for Wii and Xbox have been very different so far, but for price-sensitive customers the new prices may make all the difference," Strategy Analytics analyst David Mercer said.