Even though Microsoft Corp. has officially denied intention to slash prices on the Xbox 360 game machine, the cost of the console has lowered in the United Kingdom. Theoretically, other countries may follow and the product will still cost less compared to the upcoming PlayStation 3.

A news-story at GamesIndustry.biz web-site claims that Microsoft had officially dropped recommended retail price of the Xbox 360 core system to £199 ($377) from £209 ($396) earlier. Pricing of the better-bundled Xbox 360 variation remained on the level of £279 ($528). When asked for comments, Microsoft representatives in the UK declined to elaborate and said that the price-drop was conducted by retailers itself.

“Retail price is set by our retail partners. Retailers are already selling Xbox 360 Core System from £199.99, which we believe is outstanding value to consumers,” an official for Microsoft is reported to have said. Earlier Microsoft also said that it will not slash the Xbox 360 price, but will offer certain “surprises”, which will improve value of the game console to end-users.

Nevertheless, retailers said that the instruction to drop the Xbox 360 price came from Microsoft.

“The [Xbox 360] Core version has dropped by £10 today – they’ve issued it directly so it’s not been driven by retail,” a spokesperson for a leading entertainment retailer is reported to have said.

Microsoft Xbox 360 console is based around microprocessor developed by IBM, high-definition visual processing unit designed by ATI Technologies, I/O controller engineered by SiS and some other key components. The gaming machine will provide a broad set of multimedia capabilities in addition to games. Depending on the bundle, Microsoft Xbox 360 currently costs $299 or $399 in the U.S.