Sony Computer Entertainment America said Tuesday it will cut the price of its PlayStation 2 game system by 23 percent to $99.99 as of April 1.

PlayStation 2 set the industry standard for worldwide mass market adoption and is a clear embodiment of Sony's commitment to platforms that deliver 10-year product lifecycles, says Jack Tretton, president and CEO of Sony Computer Entertainment, in a statement.

The company said it is making the price cut in order to take advantage of a principle called elasticity of demand, which says that unit sales increase as the price decreases. However, Sony has already sold over 50 million PlayStation 2s in the United States alone and 136 million worldwide.

PlayStation 2 is almost a decade old after being launched in October 2000 in the United States.

Meanwhile, the PS3, out since 2006, has found itself in an uphill battle against Microsoft's Xbox 360 and the Nintendo Wii.

Well most importantly, this new price means that more people than ever will be able to join in on the fun that so many of you PlayStation 2 owners have been enjoying for years, which means new families will become part of the platform's record-breaking install base, Koller wrote. With this new price, we intend to introduce a new generation of consumers – some of whom weren't even alive when the system was first introduced in 2000 – to the immense entertainment value offered by PlayStation 2.

Koller also acknowledged that while the typical lifespan of a game console is five years, the company also redesigns them over time. Moreover, he said, consumers have held interest in the platform for a number of years: [It] speaks to the technology and features that were packed into PlayStation 2 from the beginning, as well as to the ongoing support the platform enjoys from the publishing and retail communities and, well, all of you fans, he wrote.

Rumors have swirled for months that Sony would cut the price of the PS3 to $299, but the company has denied all claims.