Microsoft Co. is set to release a cheaper, bare-bones version of the Xbox 360 video game console in Japan to boost flagging sales ahead of the arrival of new machines from rivals later in the year.

The Japanese unit of U.S.-based Microsoft Corp. will launch a Xbox 360 console on Nov. 2 that comes without the 20-gigabyte hard drive and other accessories included with the standard version, according to Microsoft spokesman Jun Yoshihara.

The low-end version, already sold as the Xbox 360 Core System in the United States and Europe, will sell for 29,800 yen, or $255 ? about 10,000 yen, or $86, less than its standard version, Yoshihara said.

Microsoft, based in Redmond, Wash., will also offer two free games to buyers of the new model in Japan for a limited time, he said.

Players don't need a hard drive to run most Xbox 360 games, unless they want to save games midway, and can buy a 20-gigabyte hard drive for about 9,500 yen ($80) or a smaller memory stick for 3,200 yen ($27).

Sales of Xbox 360 in Japan have been sluggish in Japan, at 158,000 units as of Sunday from its release late last year, according to Enterbrain Inc.

The software company, which does not release sales figures in Japan, has sold about 5 million units of the video game console worldwide.

Microsoft's announcement came after rival firm Sony Computer Entertainment Inc. said Wednesday its PlayStation 3 will go on sale in November in the United States and Japan, but fewer units will be available for the launch dates.

Worldwide, Sony expects to ship only 2 million units of its much-awaited update to the popular game console instead of 4 million as originally planned, Sony Computer chief Ken Kutaragi said Wednesday. Another competitor, Nintendo Co., is set to introduce its Wii game console within the year.