PS2 and Xbox to see price-cuts within weeks

Both Sony's PlayStation 2 and Microsoft's Xbox are set to see price cuts in the coming month as the battle for Christmas sales dominance kicks off earlier than ever - with both companies also planning a range of other promotions.

The PlayStation 2 price is set to be cut to £129.99 in the UK within the coming months, according to sources who spoke with our sister site Eurogamer.net today - a cut which brings the console in line with the Xbox and GameCube, and indeed with the price of the hardware on the continent.

However, Microsoft will respond with a price cut of its own - with Xbox due to come down in price as well, probably to a £99.99 price point. We expect the Xbox cuts to appear around mid-October, although as ever, there's a good chance that whichever company tips its hand first will cause the other to follow suit within hours.

Sony also plans to continue its successful strategy of bundling key games with the console, with a number of new packs due to hit shelves across Europe in the coming months. The first will be a bundle featuring a console along with copies of Pro Evolution Soccer 2 and GTA: Vice City, which appears on October 8th priced at â'¬229 (£159.99).

This will be followed by a bundle with Ubi Soft's Prince Of Persia: Sands of Time, which appears on November 13th at â'¬209 (£144.99), and a new Eye Toy bundle - incorporating the current Eye Toy pack (console plus Eye Toy Play) along with a copy of the second volume of Eye Toy games, all for â'¬229 (£159.99).

The final Christmas bundle from Sony will be a Gran Turismo 4 pack retailing at â'¬209 (£144.99), which brings the company full circle on bundle deals - the very first PS2 bundle was the special pack prepared for Gran Turismo 3.

Microsoft, meanwhile, is planning to fight back with a number of initiatives predictably enough centred around the Xbox Live service. Principal among these is the decision to offer two months of free Live access to anyone purchasing a new Live-enabled title, in the hopes of promoting the service outside of the niche market it currently attracts. The company will also be offering a cheap standalone version of the Xbox Communicator to enable people on the free trial to use the voice chat functionality of the games.

The company is planning to make renewing your Xbox Live subscription as easy as possible too, with the introduction of scratch cards which can be purchased at retail outlets and provide a unique code to activate your account. The cards will be available in denominations of three, six and twelve months, and they handily sidestep the problem of people not wishing to use their credit card to pay for subscriptions.

Xbox software is also seeing price cuts - effective immediately, Tao Feng, Dead or Alive: Xtreme Beach Volleyball and the fantastic Project Zero are being dropped to £29.99, and in the next few weeks Quantum Redshift, Toe Jam & Earl III, Blinx and Shenmue II will be officially dropped to £19.99 (although they won't become part of the similarly priced Classics range).