UK retailers seem to be feeling good about yesterday’s announcement of Microsoft slashing prices in Europe. Top retailers HMV and GAME have weighed in on the announcement and told gamesindustry.biz that Microsoft certainly got the timing down, and that they expect hardware sales to increase as the Easter holiday period is approaching.

GAME’s UK managing director Tricia Brennan, who would do a good job as a Microsoft spokesperson, said: “With prices now starting at just under GBP 160, there’s no doubt that the three different versions of the 360 represent outstanding value for money with the incredible technology and sheer volume of entertainment that they offer.”

Tim Ellis, head of games for HMV: “We’re certainly expecting a discernible lift in hardware sales, and through this, an increase in demand for key software titles also.”

As for Sony, things don’t look as rosy now that the price differences between the competing consoles are even larger. Or that’s what analyst David Mercer says at least: “Sony will be nervous that the PS3’s recent sales surge may fizzle out now that the premium Xbox 360 undercuts the PS3 by GBP 40, and the cheapest Xbox model is almost half the price of the PS3.”

Mercer believes that Sony will be scrutinising the daily sales reports, but probably won’t lower prices until later in the year.