Sony Corp will start selling a new configuration of its PlayStation 3 video game console, with less built-in storage capacity, in Europe on October 10, priced at 399 euros, the company said on Friday.

The model, which will also be available in the Middle East, Africa and Australia, has a 40-gigabyte hard drive and includes the ability to access the Internet wirelessly.

Sony also said it would cut the price of its 60-gigabyte PS3 by 100 euros to 499 euros while stocks last.

Sony launched the PS3 in the United States last November with a 20-gigabyte model and the bigger 60-gigabyte model, which was expected to cater to gamers who also use the device to watch video and movies. Sony discontinued the lower-capacity PS3 in North America due to strong sales of the higher-capacity model.

The new 40-gigabyte configuration is one way Sony hopes to spur demand for the PS3, which has struggled since its launch, compared with the success of rival Nintendo Co Ltd's Wii.

Sony, whose PS3 also competes with Microsoft Corp's Xbox 360, previously said it was confident of doubling PS3 shipments to 11 million in the year ending next March.

Unlike the 60-gigabyte version, the 40-gigabyte PS3 cannot play games developed for the older PlayStation 2 model.

Sony Computer Entertainment of America has declined to comment on when it might launch a 40-gigabyte PS3 in the United States.

This thing being 100 euros cheaper implies very strongly that the U.S. version will be $399, Wedbush Morgan analyst Michael Pachter said.

Sony dominated the $30 billion global game industry for about a decade from the mid-1990s with its PlayStation and PlayStation 2, selling more than 100 million units of each. But it was a year behind Microsoft in releasing PS3.

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