Sony Corp will launch a cheaper version of its PlayStation 3 game console and plans to cut prices on existing models effective August 19 in Europe and the United States to bolster sales and take aim at rivals Microsoft and Nintendo.

The new slim version of the PS3 will be launched in the first week of September, priced at 299 euros ($422.7) in Europe and $299 in the United States, Sony Computer Entertainment Chief Executive Kazuo Hirai said at the Gamescom video game trade show in Cologne, Germany, adding that the price for the console in Japan will be 29,980 yen ($315.6).

Sony's current pricing is $399 for a 80GB model and $499 for its 160GB model.

In 2004, as you may recall, we launched a slim version of PlayStation 2, a defining moment for that console, helping us to really expand the user base of PlayStation 2 further, Hirai said.

Today is that day for PlayStation 3.

Hirai said that the new console would be available around the world from the first week of September, consuming 34 percent less power than the original model and being 32 percent smaller.

Analysts had expected such a move, aimed to spur sales of the company's system, which has lagged behind rival game machines by Microsoft and Nintendo.

The price cut comes after weeks of pressure from gaming industry leaders like Robert Kotick, the CEO of publisher Activision Blizzard Inc, who say lower console prices would spark the slumping sector.

The machines are often a centerpiece in the home, delivering many hours of disc-based and online gaming, and all but Nintendo's Wii play DVDs and stream movies from the Internet. But sales have suffered as consumers reconsider expenses on leisure and entertainment.

Sony dominated the global video game industry for a decade starting in the mid-1990s, but sales of the PS3 have lagged behind Nintendo's Wii console and Microsoft Corp's Xbox 360, its other main rival.

Price cuts are not unusual for video game console makers. Microsoft's sales got a boost last September after the company cut prices on some of its Xbox 360 video game consoles by about $50. The Xbox 360 now sells in three models ranging from $200 and $400.

A smaller console size does not necessarily mean more value for consumers. Starting at $199, Xbox 360 offers the best gaming and entertainment experience at the most consumer-friendly price on the market, Microsoft said in an emailed statement when asked about a comment on Sony's move and about a potential price cut for the Xbox 360.

Nintendo did not immediately have any comment about Sony's announcement.

(Additional reporting by Franklin Paul and Gabriel Madway in San Francisco; Editing Bernard Orr)