A week after Sony announced the PS3 Slim and price cut, Microsoft is answering back. They've slashed the prices on the 120GB and 60GB models of the Xbox 360.

The 120GB Xbox 360 "Elite" sees its price reduced from $399 to $299. The 60 GB "Pro", previously $299, is now $249. The Xbox 360 "Arcade" with no hard drive will keep its $199 price tag. If you're in the UK, the new "Elite" price is £199.99.

The 60 GB model is being discontinued so they'll be burning off their remaining supply. Microsoft won't be introducing another model to replace it so in the future only the "Arcade" and "Elite" models will be sold.