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The Xbox 360 base model has been reduced from 27,800 yen ($257 USD) to 19,800 yen ($183 USD), while the high-end model with a 120 GB hard drive will now retail for 39,800 yen ($368 USD). A mid-range model with a 60 GB HDD will be introduced for 29,800 yen ($286 USD).

All changes would take effect on September 11. There's no indication yet whether these price cuts are just an attempt to jump start its failing efforts in the country, or if Microsoft also plans to lower prices here in the US as well.

By all measures, the Xbox 360 has been a failure in Japan. While it certainly is doing much better than its predecessor, sales remain slow. Since being launched in December 2005, the system has only sold some 700,000 units according to Japanese video game magazine Enterbrain.

Compare this to Sony's PlayStation 3, which sold some 2.3 million consoles since its December 2006 launch, or the market leading Nintendo Wii, which has sold a staggering 6.7 million in the market since November 2006.

While success in Japan is not necessarily a requirement for video games to do well, it is more of a psychological boost for any video game maker. Many look to the country for clues as to what may be a successful future trend.

The 360 also has two new role-playing games out this week, which may help its fortunes. Tales of Vesperia was launched last month, and sales of the console rose significantly along with it. Another title, Square Enix's Infinite Undiscovery, is due out this week and could provide another boost.