Microsoft is to manufacture 17,000 Xbox 360 consoles in Brazil every week following the opening of a new factory in Manaus.
The move means Microsoft will be able to sell the Xbox 360 for 40 per cent less than in the past. Existing stock will be cleared at a minor discount, bundled with Forza Motorsport 3 and Alan Wake.
In July, Sony launched the PlayStation Store in Brazil, and earlier this week Blizzard confirmed the release of localised version of World Of Wacraft in Brazilian Portuguese. Market research firm Newzoo recently named Brazil as one of the world's key emerging videogame markets, along with Russia and Mexico.