In a shock move, Microsoft has slashed the price of its Xbox 360 console in Europe, making the basic package now cheaper than a Wii.

From this Friday in Europe, Microsoft is cutting the price of all Xbox 360 packages. The "Pro" version of the uni, which comes with a 20GB hard drive, will sell for �269, a reduction of around �80. Similarly, the "Elite" will be available for �369.

Most notably however is the fact that the same �80 reduction will mean that the basic "Arcade" version of the 360 with no hard drive will sell for �199/�159 - cheaper than a Wii by around �40/�20.

No doubt Nintendo will be monitoring the situation closely - will the Wii see a price cut in response? Stick with N-Europe and you'll be the first to know...