The Financial Times reports from San Francisco:
Sony announced a $399 40GB PS3 for the US on October 17 while Microsoft confirmed that it would launch a new $279 Xbox 360 Arcade. The moves increased price competition with the Nintendo Wii, which remains the cheapest of the new consoles at $250 for the crucial holiday season sales period.
While Microsoft hopes to challenge the Wii with the Arcade, its $349 Xbox 360 Premium faces pressure from the $399 PS3, which has a bigger, 40-gigabyte hard drive, built-in wi-fi and a Blu-ray drive.
"I think Microsoft almost has to cut the price of the Premium or bundle it with some games," said Wedbush Morgan Securities analyst Michael Pachter. He said the only surprise in Sony's announcement was the inclusion of the Spider-Man 3 Blu-ray disc in the package.
The Financial Times reports that the $399 PS3 will be available on November 2.