Widespread rumours of Xbox console price cuts in Europe were confirmed today. The entry level SKU, Arcade, will fall to GBP159.99. The mid-range Pro will sell at GBP199.99 and the Elite at GBP259.99. Euro prices have fallen to equivalent levels. Amazon.co.uk is already selling the consoles with additional discounts to the new recommended prices. Microsoft's Chris Lewis, who heads up Xbox in EMEA, told us that the Xbox was now entering the "mass market space" with these new price points, opening up a "much broader range of consumers". Clearly the fact that the Arcade is now the cheapest console of the current generation will help to bring it to the attention of a wave of customers that have previously dismissed the current range of products as too expensive. While the Wii remains difficult to find at its recommended GBP180, Nintendo will be watching carefully for any signs that potential Wii buyers opt for the Arcade because of its wider availability or lower price point. Yes, the buyer segments for Wii and Xbox have been very different so far, but for price-sensitive customers the new prices may make all the difference. The PS3 is now left once again as the most expensive console. Sony will be nervous that the PS3's recent sales surge may fizzle out now that the best Xbox 360 is £40 cheaper, and the cheapest one is nearly half the price of a PS3. Sony too will be scrutinising the daily sales reports, but will probably try to hold out until later in the year before making its next price move. We asked Lewis to address the question of the impact of the price cuts on Microsoft's profitability. He indicated that the company's Entertainment and Devices division has moved into "overall sustainable profitability" in the last few months, and claims that the new console price points will not significantly change this position as it continues to drive cost out of console manufacturing.