Despite denying poor sales, Microsoft has announced just a month after launch that it will reduce the price of its Xbox console by £100.

Microsoft insists this is part of its long-term strategy, which will benefit retail partners and publishing partners, and not due to falling sales.

From 26 April the console will retail at £199, the same price as Sony's PS2 console and only £20 more than Nintendo's game cube (£170), which is due to be launched on 3 May.

"The price may have been a little high," said a company spokesman, "and customer feedback has now told us this," a phrase easily translated to 'people haven't been buying them'. "We want to make sure the price is not an obstacle," he added.

One would have thought that the million-odd gamers who have already splashed out £300, not to mention those who waited in queues on launch day for hours, would be infuriated by this move. To asuage this, they'll be entitled a free games controller and two free games, worth around £100.

If you are one of those people, you must download an application form and email it to Microsoft before 1 July.

The move itself is not really a surprise — what is surprising is the speed with which Microsoft has done this. Sony and Sega also dropped the price of their consoles to below £200 after launch, but not before the first year's sales were in.

"We are happy with sales, they are not as bad as has been reported. But a price decrease will undoubtedly increase sales," added Microsoft's spokesman.