TechRadar was the first to confirm the new Xbox 360 price cuts last week, with the official press release dropping into journalists' in-boxes this morning.

According to some reports, retailers were also a little taken back with surprise by the news, which seems to have been rushed through following leaks from a Woolworth's employee last week.

VG 24/7 reports that they were "told by a reliable source this morning that the announcement was jumped forward thanks to last week's Woolworth's leak."

Economies of scale

The price-drop is "an aggressive but not unexpected move by Microsoft," claims journalist Steve Boxer.

"It is essentially capitalising on the fact that of the so-called next-gen consoles, the Xbox 360 has been on sale the longest. In the console world, the more you manufacture, the cheaper they become to manufacture, so as any console moves through its life-cycle, it inevitably becomes cheaper."

The most significant price-drop concerns the standard, 60Gb Xbox 360 at £169.99 which, as Boxer notes, "is now cheaper than the Nintendo Wii."

Microsoft Wii60

"Sony, which has repeatedly said that it will not drop the price of the PS3 in the near future, is worried by Microsoft's move, as the PS3's high price has been an issue for consumers throughout its existence.

"Microsoft is clearly also hoping to snare consumers who have been introduced to gaming by the Wii and now crave more grown-up gaming experiences. But it will be interesting to see how Sony responds, given the burgeoning credit-crunch."

Either way you see it, it's great news for the consumer, with the Arcade now costing £129 (€179), 60Gb Pros priced at £169 (€239) and Elites at £229 (€299).