Sony Computer Entertainment has responded to fierce competition in the games console market by slashing the price of its Playstation 3 to €400.
The price is for a version of the console with a smaller 40-gigabyte hard drive and it will not be able to play titles released for Sony's previous generation console, the Playstation 2.
It will go on sale in Ireland next Wednesday, October 10th.
Sony also said the original 60-gigabyte Playstation 3, with two game titles, will be available for €500 "while stocks last". It launched in the Irish market last March for €629.
Sony said the new console was not backwards compatible to reflect "the reduced emphasis placed on this feature among later purchasers of PS3, as well as the availability of a more extensive line-up of PS3 specific titles".
The Japanese company will have 65 titles for its third-generation machine by Christmas.
"We are delighted to offer our consumers the opportunity to enter the world of high-definition entertainment at a truly affordable price," said Niall O'Hanrahan, managing director of Sony Computer Entertainment Ireland.
Sony dominated the €21 billion global game industry for a decade from the mid-1990s with its PlayStation and PlayStation 2, selling more than 100 million units of each. However, it has lost ground to both Microsoft's Xbox 360 and Nintendo Wii in the current generation of consoles, and was a year behind Microsoft in releasing Playstation 3.
Separately, Microsoft said it was "evolving" its relationship with its wholly-owned subsidiary Bungie Studios and the games studio would become an independent entity. Financial details of the transaction were not released but Microsoft will retain a stake in the maker of Halo 3.
This week Microsoft said Halo 3, which is only available for Xbox 360, was the best selling video game ever, with sales of $300 million being racked up since its launch on September 24th.
