Sony Corp is slashing the price of its basic PlayStation 3 gaming console by nearly a fifth in the United States, hoping to jump-start sales of a device losing ground to Microsoft Corp's Xbox.

Sony, which has been struggling to recover from a massive hacking effort that turned up serious security flaws on its PlayStation network, unveiled the cuts just months before the peak holiday shopping season gets into fear.

The price tag on the 160 GB version will fall from Tuesday to $249, from $299 originally. In Europe and Japan, the basic console's price has also been slashed to 249 euros and 24,980 yen, from 299 euros and 29,980 yen, respectively.

And the larger-storage 320 GB version of the PlayStation console -- which also competes with Nintendo's Wii -- will go for $299 in the United States versus $349 originally, Sony announced on the eve of Gamescom, Europe's largest video games show.

Elsewhere, the 320 GB version now costs 299 euros and 29,980 yen in their respective markets, from 349 euros and 34,980 yen previously.

Sony said the new pricing would take immediate effect in Europe, but start August 18 in Japan.

(Reporting by Michelle Martin and Liana B. Baker in New York)