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While U.S. gamers wait for rumors of Xbox 360 price cuts to bear out, their counterparts in Japan got very good news on that front Monday.

At a media event in Tokyo, Microsoft said it will slash retail prices of its video game console by about 30 percent in an effort to better compete with rivals as the crucial holiday shopping season nears.

Microsoft said it will lower the price of the entry-level Xbox 360 Arcade model, which comes sans hard drive, by 8,000 yen ($73.92) to 19,800 yen (around $183). That's less than a Nintendo Wii or PlayStation 3 go for in Japan.

The new price drops the Xbox 360 below $200, the magic price barrier in video game machines, according to many industry observers. Go below that, the theory goes, and you potentially open up your machine to the truly mass market.

The Japanese unit of the U.S. software giant said the recommended retail price for the higher-end Elite model equipped with a 120GB hard drive will drop from 47,800 ($442) to 39,800 yen ($368).

A new standard model with a 60GB drive, meanwhile, will sell for 29,800 yen, or about $275. That's 5,000 yen, or about $46, lower than the current 20GB model. The new prices are set to take hold September 11.