Microsoft has confirmed that it is dropping the price for the Xbox 360, which sees the entry-level Arcade SKU drop to £129.99 - £50 less than Nintendo's Wii.

All of the Xbox 360 SKUs have all had their prices reduced, with the 60GB Pro available for £169.99, and the 120GB Elite available for £229.99.

"Xbox 360 has now sold over 20 million consoles worldwide and due to its unprecedented success, we are now able to pass on the rewards of that success to the consumer with a new retail pricing from £129.99", said Neil Thompson, Senior Regional Director, Microsoft UK. "With more games, more entertainment with Xbox LIVE and now even more value, we are looking forward to welcoming more customers into the leading Next Generation console, Xbox 360."

The new prices will come into effect from September 19th.