Sony follows Microsoft with price cuts

Sony announced this week that they are slashing $100 off the price tag for the PS3. This fall, the 80-gigabyte version will be marked down from $500. The 40-gigabyte version, which sold for $400 will be discontinued.

At $400, the 80 GB configuration will be a direct competition with the new Xbox 60 GB model. Microsoft recently cut prices on the Xbox and is phasing out the 20 GB model entirely. Their new 60 GB model will be priced at $349, the same previous price of the 20 GB version. By offering larger hard drives at the price points customers are familiar with, both companies hope to spur sales. An extended price war seems iffy though, considering the Wii is by far, the cheapest of the new consoles at $249.

Sony continues to try to entice customers by adding video downloads. While the Xbox announced a deal with Netflix earlier in the week. Nintendo, for now is staying out of the streaming video fray.