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According to a report in Bloomberg.com, the top of the range Xbox 360, will have 60 gigabytes of storage starting in early August and Microsoft will also drop the price of its 20-gigabyte machines, the company said.

This move has been prompted by the fact that Xbox sales in the U.S. lagged behind Nintendo's top-selling Wii and Sony's PlayStation 3 in the first five months of 2008, according to research by NPD Group. 

And in the battle for second place, PS3 has also been helped by new games and a Blu-ray DVD player that can be used to watch movies as well as play games.

Sony said it sold more than 1.2 million PS3 consoles and Microsoft sold 1.12 million Xbox 360s in the U.S. between January and May this year, according to NPD Group, but Nintendo managed to ship some 2.8 million Wii players.

This move comes in the wake of price drops in Australia of the Xbox, and although Microsoft Australia did not want to comment on the tripling of the Xbox storage, as with the price drop which was first announced in the US, and then trickled through globally, the storage increase will most certainly do the same.