Redmond, Wash. - Microsoft (NASD: MSFT) announced over the weekend that it has slashed $50 off the price of its basic 20GB Xbox 360 game console, to $299, while also unveiling plans to release a new 60GB model in August that will retail for $349. The company said the price cut on the 20GB model will go on "while supplies last," indicating it will discontinue that version of the device, while continuing to offer the hard drive-free Xbox 360 Arcade model for $280 and 120GB Xbox 360 Elite for $450.

Separately, Microsoft on Monday announced a partnership with online DVD rental service Netflix (NASD: NFLX), which will see movies and TV episodes from Netflix streamed to the Xbox 360 for viewing on a television.

The service, set to launch in the fall with an initial selection of about 10,000 titles, will be available at no extra cost to Xbox Live Gold members who are also Netflix subscribers.