File photo shows computer users trying Microsoft's Xbox 360 at a game show in Tokyo. The software giant is set to slash the price of its game console in Japan by almost 30 percent to try to boost sales amid tough competition from rivals Sony and Nintendo.

Microsoft will slash the price of its Xbox 360 video game console in Japan by almost 30 percent to try to boost sales amid tough competition from rivals Sony and Nintendo, a report said Monday.

The US software giant will cut the price of the Xbox 360 Arcade model to 19,800 yen (182 dollars) from 27,800 yen, undercutting Nintendo's Wii which has a price tag of 25,000 yen, the Nikkei business daily reported.

It will also reduce the prices of the two other Xbox 360 models, the newspaper said, without naming its sources.

Microsoft's consoles have struggled to make inroads into game-loving Japan, where the market has long been dominated by domestic makers Sony and Nintendo.

The Xbox 360, however, outsold Sony's PlayStation 3 in Japan for the first time in the week ended August 10, helped by the popularity of the new role-playing game "Tales of Vesperia," according to one survey.

Both consoles still lag behind Nintendo's easy-to-use Wii, which has proven a hit in Japan and many other countries, even with people who are not normally players of video games.

Microsoft was expected to announce the price cut later in the day.

© 2008 AFP