Microsoft is cutting the price of its Xbox 360 from today in the US, undercutting Nintendo's Wii and offering the cheapest next-generation console. Its move comes ahead of the crucial holiday sales season and follows a third-place finish in the latest US monthly sales figures, behind the Wii and Sony's Play-Station 3. Microsoft also announced a price cut of about 30 per cent for the Xbox in Japan this week. Sales have been slow there and the console has badly trailed its Sony and Nintendo rivals. Microsoft said it would cut the price of the basic 360 Arcade console, which does not feature a hard drive, by 29 per cent - from $279.99 to $199.99 - from today in the US. This will undercut the Wii, which has sold for $249.99 since its launch. Its console with a 60Gb hard drive will retail for $299.99 - a cut of $50, making it $100 cheaper than a comparable PlayStation 3, but without its Blu-ray drive and wi-fi capabilities. Its top model, the Xbox 360 Elite, with a 120Gb hard drive, will be $399. Microsoft had a year's head start in launching the 360 ahead of the Wii and PS3, but it was overtaken in June in the US, when the NPD research firm reported Nintendo had sold 10.9m Wiis to date. In July, the Wii sold 555,000 units, compared with 225,000 PS3s and 205,000 360s.