Australian gamers will have a reason to celebrate this season as Microsoft announced that it has slashed the price on its Xbox 360 and Kinect bundles by AU$50 in time for Christmas.

Following recent price cuts from its rivals Nintendo and Sony on their respective consoles, Microsoft has also reduced the price of its 4Gb Xbox 360 with Kinect bundle and its standalone Xbox 360 console. The 4Gb with Kinect bundle will now cost $399 while the 250Gb with Kinect bundle will now sell for $499 starting September 15.

Microsoft will also release a 4Gb Xbox 360 model for $249 that comes with a standard-definition composite cable, a wireless controller, built-in Wi-Fi and a one-month subscription to Xbox Live Gold Membership. Gamers who want their games in high-definition will have to buy their own HDMI cable.

"With families gearing up for school holidays they will be looking for ways to keep the kids entertained, and Kinect offers something that parents and their kids can participate in together," Microsoft Australia retail lead Andy Coughlin said. "We are pleased to now offer Xbox 360 and Kinect bundles at new lower prices, meaning Kinect and Xbox have never been more affordable."