Microsoft Hires Acer Unit to Make Xbox

Microsoft Corp. hired a unit of Taiwan’s Acer Inc. to make the Xbox video game console, seeking to cut costs and close the gap with market leaders Sony Corp. and Nintendo Co.

Wistron Corp., the manufacturing arm of computer maker Acer, will make the console in its plant in Zhongshan, China, by the end of the year.

Slack demand for the Xbox prompted the world’s biggest software maker to drop prices in Europe for the second time last week.

To keep costs low, Microsoft is outsourcing the console, signing up Wistron as the second supplier after Singapore’s Flextronics International Ltd.