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More Xbox One price cuts on the way thanks to new processor

Microsoft's Xbox One console may soon receive a permanent price drop after reports surfaced online that a cheaper processor is in development.

The US firm has already cut the price of its next-gen console three times since it launched last November. In September, the price of the Xbox One was reduced to £329.99, making it less expensive than Sony's Playstation 4 for the first time.

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Rumours of another price drop emerged after an AMD chip design manager updated his LinkedIn profile, which has since been made private, with news that he worked on a "cost-reduced" version of the console's processor. Recent AMD roadmap leaks suggest that the first CPU architecture based on the more efficient hardware will launch in 2015.

Consoles often undergo processor upgrades as new technology becomes available during the device's lifespan. They are often used to give consumers smaller, more affordable hardware that produces less unwanted noise.

For Microsoft, however, the upgrade could be particularly crucial with rival Sony's PS4 console continuing to outsell the Xbox One in a number of territories. Industry experts have suggested that the console's higher price tag is partly to blame for its struggle to compete in terms of sales figures. The Xbox One was priced at £429.99 at launch in the UK, with the PS4 significantly cheaper at £349.99.

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Microsoft has also recently signed marketing deals with EA and Activision for FIFA 15 and Call of Duty: Advanced Warfare respectively, and will be hoping that further price cuts help the Xbox One gain the upper hand in the console battle.