Sony's decision to drop the price of the PlayStation 3 (PS3) and the introduction of a cheaper version of the console have boosted sales of the gaming machines in North America.

The company said that combined sales of the older 80GB model and the new 40GB model have increased by 192 percent at the top-10 major retailers in North America and "more than doubled" overall.

After seeing poor sales all year the company cut the price of the 80GB model from $599 to $499 in the US, and introduced a cheaper $399 version on November 2, with a lower capacity hard-disk drive. In addition to the smaller drive, the cheaper version lacks the ability to play PlayStation 2 (PS2) titles.

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The higher sales are good news for Sony, which has been running in third place in the console battle in the US. In October, 121,000 PS3 consoles were shipped, according to estimates from NPD Group. That ranks it lower than the seven-year-old PS2, which shipped 184,000 units in the month. The market-leading Nintendo Wii shipped 519,000 units and Microsoft's Xbox 360 shipped 366,000 units, said NPD.

However they will likely increase losses in the company's gaming business. The unit reported a ¥96.7bn (£450m) operating loss in the July to September quarter largely because Sony is losing money on each PS3 console sold. It is looking to increase market share and boost the number of software titles available to make up these losses on future game software sales.

Going into the US holiday season Sony is running its largest marketing effort to date in an attempt to kick-start sales of the PS3. The national advertising campaign will see commercials air on several TV networks including NBC, Fox and the ESPN cable sports channel.

To compete better in the low-end, where Nintendo's Wii has stolen a lead with its innovative motion-sensing controller and low price, Sony is offering a bundle of the PS2 with the SingStar Pro software and two microphones for $149.