With more than two months to go before the Xbox 360 launches in Europe, a top Microsoft executive has announced that yearly price cuts are planned for the console.

Xbox 360 is due to launch in Europe on December 2, priced at £209.99 for the basic "Core System". For another £70 consumers can purchase a package which also includes a hard disk, media remote, wireless controller and other extras.

"We will wind up cost-reducing the product every year," Todd Holmdahl, corporate vice president of the Xbox product group, told Reuters. It's estimated that the 360 costs approximately $100 less per unit to manufacture than Sony's PS3, giving Microsoft more scope for price cuts.

The current gen Xbox had its priced slashed by £100 just six weeks after it debuted in Europe - apparently because less than 200,000 units were sold in the month following launch, according to some estimates.

But there's now a firmly established Xbox fanbase in the UK, and it seems unlikely that Microsoft will be forced to make such a drastic move this time around.

Microsoft was unavailable for comment at the time of writing.