Microsoft confirms 360 price drop, announces 60GB model

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Confirming earlier rumors, Microsoft has officially unveiled the new 60GB Xbox 360 which is set to replace the current 20GB model. The new unit is set to hit US retail shelves in August priced at $349, while the 20GB model will drop to $299 until stocks are depleted.

Prices for the 120GB Elite and hard drive-less Arcade models will remain the same at $449 and $279, respectively. As with the 20GB version, Microsoft will be bundling the new 60GB model with a wireless gamepad, a wired headset and a one-month subscription to Xbox Live.

The move bumps up competition with Sony’s PlayStation 3 console, which outsold the 360 in the first five months of 2008 amid new exclusive games launches and the rise of Blu-ray as the dominant high-definition disc format. The boost in storage capacity is also in tune with Microsoft’s push for digital downloads of movies and TV shows.

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