Sony is slashing the price of its PlayStation 3 games console by 17% in the US to boost sales.
As a result of the $100 price cut the PS3 will now cost $500 (£249), $20 more than the rival Microsoft Xbox and twice as much as the Nintendo Wii.
The Xbox and Wii have been significantly outselling the Japanese firm's PS3 in the US market.
The news came as Microsoft said it would not be cutting the Japanese price of its Xbox to lift lacklustre sales.
Microsoft made the announcement a week after it said it was spending $1bn to repair problems with the Xbox 360.
Hmmmm, interesting, the cut is only small, but it brings its market position closer to the 360. Im pretty sure the cuts will follow here before Xmas too, if not within the next few weeks. BBC News Report