Circuit City Stores Inc. this week began selling a refurbished hard drive and controller for Microsoft Corp.’s Xbox 360 for under $40 in a new online promotion.

Circuitcity.com is offering the refurbished Xbox 360 20GB hard drive and Xbox 360 wireless controller for $39.99.

The package is an value buy for owners of the Xbox 360 Arcade SKU, which does not include a built-in hard drive.

Microsoft in Nov. began offering an Xbox 360 60GB Live Starter Pack at $99.99 as an option to upgrade current Arcade units.

A hard drive is required to utilize the New Xbox Experience dashboard and download online game content.

Microsoft this week said that the Xbox 360 hardware outsold Sony Corp.’s Playstation 3 by 3-to-1 on Black Friday, according to internal retail data sales figures.

Additionally, the company said 360 sales were 25 percent ahead of Black Friday sales figures from 2007.

This holiday, Microsoft released sequel game titles to headline year-end sales, including Gears of War 2 and Fable II.

Microsoft on Nov. 19 launched the New Xbox Experience, a dashboard overhaul that adds new channels and community services to Xbox Live.

Microsoft on Sept. 5 discounted all Xbox 360 hardware in the U.S. between $50 to $80 to spur sales.

The Xbox 360 sold 371,000 units in Oct. to rank as the No. 3 hardware for the month.