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Sony has launched an aggressive pricing war aimed at ensuring the success of Playstation 2 against its competitors Nintendo and Microsoft.
Sony has announced that it will reduce the prices of Playstation in the key market of Japan by 15% in order to boost holiday sales.

Competition has been hotting up in the games console market for months, ahead of Microsoft's entry into the market.

The tough marketplace has already claimed one casualty this year, after Sega announced that it was to quit making its Dreamcast console in order to concentrate on software.

Three-way battle

Earlier this month, Microsoft unleashed its first games console, the Xbox.

Nintendo is also battling intensely to win back its position as market leader from Sony, through its new GameCube, the successor of GameBoy.

Playstation 2 - which went on sale last year - has the advantage of already being a favourite in the Japanese and European marketplace.

It has already sold more that 20 million units worldwide, despite some initial technical difficulties.

This leaves Nintendo and Microsoft with a lot of ground to catch up on.

Nintendo has sold 510,000 GameCube machines since September, while initial US shipments of the Xbox were thought to be around 300,000 consoles.

Pricing dilemmas

The price war comes despite the heavy cost of updating existing models and developing more sophisticated consoles.

The suggested Japanese retail price of the Playstation 2 console will now be reduced to 29,800 yen ($240) from 35,000 yen ($282).

But this is still significantly more expensive than the GameCube which is on sale at around 25,000 yen ($201) per console

The Xbox is on sale in the US at $299 but is not expected to arrive in the Japanese market until February.

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Nintendo is also battling intensely to win back its position as market leader from Sony, through its new GameCube, the successor of GameBoy.

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