Microsoft has ramped up the price wars by announcing an Xbox One bundle that includes a console with 1TB storage, two free games and $50 credit for the online Microsoft store, all for $399.

The news, announced by Microsoft’s Larry Hyrb on Twitter, comes on the same day as Sony’s announcement that a 1TB PlayStation 4 will launch next month at an undisclosed price. Microsoft earlier this month announced the 1TB Xbox One would be available for $399, dropping the price of the 500GB model to $349.

The bundle, available from Microsoft's online store, comes with “Halo: The Master Chief Collection” and a second disc-based game with maximum retail value of $59.99. The second free game is part of a promotion, running from June 21 to 27, that applies to any Xbox One bought within the period. The $50 store code is available until June 30.

The new controller allows for standard 3.5mm headsets to plug straight in, dropping the need for an adaptor. Users who have already purchased a headset adaptor can, however, plug it into the new controllers to use the built-in volume controls.

The PlayStation 4 currently retails for the same price as the bundle, and includes a 500GB console, headset, controller and a choice of “The Last Of Us” or “Batman Arkham Knight.”