Microsoft has dropped the price of its Xbox One 500GB line-up with the launch of the sleeker Xbox One S on the horizon. 

All 500GB consoles, including ultimate and special edition bundles, will now retail for $249. By contrast, the 2TB Xbox One S launch edition will hit shelves on August 2 for $399. 

The company only recently slashed the price of most Xbox One bundles by $50 in the run up to E3, and it was at this year's conference that it lifted the lid on the Xbox One S and Project Scorpio. 

Both machines will give consumers the chance to get their hands on a mid-cycle upgrade, with the Xbox One S squeezing high-dynamic range and 4K video support into a box that's 40 percent smaller than the original Xbox One. 

As for Project Scorpio, not much is known about the system right now, although Microsoft has suggested it will pack a significant punch -- with the console maker touting "six teraflops of power" -- and enable virtual reality support.