Microsoft Corp. (NASDAQ: MSFT) said on Thursday that it would launch an updated version of its Xbox 360 game console on October 11 in Japan as it competes against rival products from Japanese favorites, Nintendo and Sony.

The world's largest software maker will introduce enhance its game console with a 120-GB hard-drive, six times larger than the regular drive, enabling users to store more songs and games. Dubbed the Xbox 360 Elite, the refreshed console can hold twice as much data as Sony's Playstation 3.

Microsoft hopes the new offering can help it regain footing in a market it has had difficulty penetrating.

Although popular in the United States, the Xbox 360 sold only 122,565 in the first half of this year in Japan. Nintendo sold 1.78 million units of its Wii and Sony sold 503,554 of its PS3 consoles during the same period.

The Xbox 360 Elite will sell for ¥47,800 (about $390). The basic version of the Xbox 360 console currently sells for ¥29,800 (about $244) in Japan.

In North America, the Xbox 360 Elite sells for $480.

Shares of Microsoft fell slightly by 4 cents, or .13 percent to $29.98 in Thursday trading.