Microsoft said it is cutting the price of its 20-gigabyte Xbox 360 video game consoles and rolling out a model with three times the memory space to take its place.

The US technology giant's announcement comes two days before the official start of a major Electronic Entertainment Expo at which videogame console makers will be striving to portray their hardware as superior.

Microsoft said it will trim 50 dollars (US) from Xbox 360 models with 20 gigabytes in the United States or Canada, cutting prices to 299 dollars.

An upgraded Xbox 360 Pro model with 60 gigabytes of memory will hit markets in those same two countries in August with 349-dollar price tags, according to the Redmond, Washington-based firm.

The reasoning for the boost in memory capacity is people's interest in storing digital photos, video, music and other data on gaming consoles which are essentially entertainment computers connected to television sets.

"We know consumers need more and more space to store the amazing digital content Xbox 360 offers, and we're giving it to them at no extra charge,' said Albert Penello, Xbox director of product management Albert Penello.

Sony maintains it has no intention of cutting prices on PlayStation 3 models, which sell in the United States for 400 0r 500 dollars depending on memory capacity.

Nintendo will be defending Wii's crown as the world's most popular videogame console, which is priced at 250 dollars and is snatched from shelves as soon as it arrives in stores.

The big three console makers along with videogame software makers large and small will be showing off their newest creations at the Expo in Los Angeles during the coming week.

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