Microsoft and Sony are ramping up for the holiday shopping season by announcing price drops on their high-end video game consoles.

While it seems silly -- or maybe just depressing -- to be talking about the holiday-shopping season in August, the makers of high-end video game consoles have already begun discounting their wares in advance of the upcoming fall shopping onslaught.

Beginning tomorrow, Microsoft will drop the price of their Xbox 360 Elite console from $399 to $329, while the regular Xbox 360 will dip in price from $299 to $279, an Xbox Canada spokesman said yesterday. The price of the Xbox 360 Arcade console, which lacks some of the features found on the other models, will remain at $229.

For a limited time, the $329 Xbox 360 Elite will include a copy of the bestselling sci-fi shooter Halo 3, as well as the Xbox 360 Wireless Networking Adapter, normally sold separately for $99.

Microsoft's price drop comes on the heels of Sony's introduction of a newer, cheaper version of the PlayStation 3 console, which currently trails in sales behind the Xbox 360 and Nintendo's top-selling Wii. The slimmed-down PS3 begins arriving in stores this week at a cost of $299, $100 less than the previous model it replaces.

While Sony announced the new PS3 just last week, Microsoft maintains that their Xbox price drop this week is not a reaction to their competitor's discount.

"This has been part of our holiday strategy for a long time," said Xbox Canada's Craig Flannagan, pointing specifically to the time it took to create and ship the new Xbox Elite bundle in new packaging. While the Xbox 360 Elite bundle is a limited time offer, Flannagan couldn't say how long it will run or how much stock is being allocated for it.

The price cuts have sparked a new round of competitive boasting between the rival companies. Sony points out that the PlayStation 3 plays Blu-ray movies, has built-in Wi-fi and features free online play, while Microsoft stresses the Xbox 360's line-up of exclusive games, a richer online experience that includes high-definition movie downloads and the upcoming Project Natal device, which will allow gamers to use gestures and voice commands instead of a traditional game controller.