At the same time the media praises the $500 Apple iPhone (a 2-year contract!), there has been constant whining about the price of Sony PlayStation 3 ($599). Well, Sony doesn't have the media appeal of Apple or Steve Jobs as spokesman, so they have to slahsh prices in order to remain competitive. On the other Nintendo Wii has managed to reshape the 3rd generation console market by delivering a low cost yet low performance console with a new twist in gameplay. I am pretty sure that the success of Wii has surprised the decision makers of Sony and potentially at Microsoft too. So here is Sony's response and now we are waiting for the counter strike from Microsoft.

Sony Computer Entertainment Europe has contacted GamesIndustry.biz to state that the company will be making a major announcement regarding the PlayStation 3 this Thursday at the E3 Media and Business Summit.
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Sony has slashed the price of the 60GB PlayStation 3 to USD 499 effective immediately, while introducing a new 80GB version, bundled with a copy of Evolution Studios' MotorStorm, for USD 599.

Source: GamesIndustry.biz