On the heels of Sony reducing the price of its PlayStation 3 and announcing the PlayStation 3 Slim, Microsoft announced Thursday that it too will be dropping the price of its console.

Starting Friday, the Xbox 360 Elite will be priced at $299, $100 cheaper than its current price. The Xbox 360 Pro, which currently retails for $299 will be priced at $249 starting Friday. Once retailers sell through their entire stock of Xbox 360 Pro units, that SKU will no longer be offered by the hardware maker.

Going forward, Microsoft will offer only the $299 Xbox 360 Elite with its 120GB hard drive, and the $199 Xbox 360 Arcade which comes bundled with five games and a 256MB memory unit.