TOKYO: Sony is stepping up its challenge to Nintendo's phenomenally successful Wii game console with the launch of the PS3 'Slim', which will sell for €299 ($419, £271), €100 less than its current models.

The Slim will be launched worldwide in September and will include some of the same features as current PS3s, including the ability to play Blu-ray discs.

Sony has tried to position the PS3 as more than a games console by including such features but they have driven up production costs. However, the company still needs to compete on price with Microsoft's Xbox, which starts in the UK at about £130 ($202, €143) and the Wii at £179 ($279, €197).

Previously Sony had to cut the price of its PS2 machines, introduced in 2000 at £299 ($466, €328) but reduced to under £200 ($312, €220) a year later.

"For some time the PS3 has looked out of line with its rivals and we've been surprised that Sony hasn't reduced the price sooner," says David Mercer, an analyst at industry specialist Screen Digest.

The organisation's Ed Barton adds, "To sell tens or hundreds of millions of units you need to come under the £200 piece tag. Our consumer panel research shows that there is a significant pent-up demand for the PS3, especially in Europe, and the main constraint has been price. The question is whether Sony can sustain that."

Data sourced from FT: additional content by WARC staff