Microsoft will begin selling in April an upgraded version of its Xbox 360 console that packs a higher capacity disk drive and high-definition video interface not present on current models and is still less expensive than the rival PlayStation 3.

The Xbox 360 Elite will cost about $480 compared with the $499 price tag of the low-end PlayStation 3 console. The hard-disk drive in the new version can accommodate up to 120GB of data, which is six times that of the drive on current models. The high-definition multimedia interface interface will also make hooking up the console to a modern flat-panel TV easier.

The console will be the third in the Xbox 360 family after the $399 standard version and $299 "core system" and its launch will raise stands to make the competitive games console market even more so.

The Xbox 360 has been on sale for more than a year. When it hit stores in November 2005 it was the first console to offer high-definition gaming although it's now sharing that distinction with Sony Computer Entertainment's PlayStation 3, which launched in November 2006. Both consoles are also battling with Nintendo's Wii, which has proved surprisingly popular among consumers thanks to its innovative movement-sensitive controller. The Wii doesn't offer high-definition.

The Xbox 360 Elite is due to hit stores in the United States on April 29. Launch dates and prices for other markets were not immediately available.

The IDG News Service is a Network World affiliate.