Microsoft is slashing the price of its Xbox video-game console to 16,800 yen (U.S., $154) ahead of the Christmas shopping season. The Xbox, which had been selling here for 24,800 yen (U.S., $228), has lagged in sales behind the PlayStation 2 machine from Japanese electronics and entertainment company Sony Corp. Xbox shipments total 9.4 million worldwide, 450,000 of them in Japan. PlayStation 2 global sales total 62.6 million and 14 million in Japan.

The Xbox price cut takes effect Nov. 20 and is possible because of the falling costs of console production, Yoshihiro Maruyama, who heads the Xbox division of Microsoft's Japan unit, said Tuesday.

The price war among game machines has been heating up. The Xbox will be cheaper than the PlayStation 2, despite its price cut due in Japan on Thursday to 19,800 yen (U.S., $182) from 25,000 yen (U.S., $230).

Adding to the game rivalry is the GameCube machine from Nintendo, known for Super Mario and Pokemon games. Sony is promising a new version of the PlayStation 2 machine that includes a DVD recorder called PSX later this year in Japan.

Microsoft also said it will give away the Music Mixer, an Xbox addition that turns the console into a karaoke machine, by distributing them through Japan's popular game magazines, starting Nov. 29.

During a limited period, a 19,800 yen (U.S., $182) package will go on sale in Japan, comprising the Xbox console, games, a two-month free trial to Xbox Live - a broadband online gaming service - and other items.