After months of silence Sony named the launch date and price for the PlayStation 3 yesterday, confirming its status as the most expensive game console yet produced.

The full version of the PlayStation 3 will be priced at $600 (about £325) in North America and €600 (£410) in Europe. Precise UK pricing hasn't yet been confirmed. It will first go on sale in Japan on 11 November, followed by North America, Europe and Australasia on 17 November.

The announcement ends considerable speculation about the pricing, sparked last year when Ken Kutaragi, president of Sony, said the machine would be expensive.

There's a reason for the high price. The console is based on the new Cell processor, which has cost Sony, Toshiba and IBM billions of dollars to develop, and includes an optical disc drive for the new Blu-ray Disc format.

The disc drive is likely to cost around $350 (£190) per unit and the Cell processor as much as $230 (£125) initially, according to an estimate from Merrill Lynch. The brokerage firm estimated that the production cost of each console would be as high as $900 (£485) to begin with.

Games consoles are typically sold at a loss to drive demand and expand the user base, with profits made on subsequent sales of software. A larger initial loss means it takes longer to recover the investment.

Sony said last month that it expects its game division to lose ¥100bn (£480m) in the year ended March 2007 because of startup and promotional costs associated with the PlayStation 3. It expects to ship six million PS3s during that period.

The console includes a 60GB hard-disk drive, a memory card reader, a Wi-Fi adapter and a digital HD (high-definition) video connector.

Sony will also offer a lower-end version of the console for $499 (£269) with a 20GB drive and none of the other features. Both versions will have USB, a Gigabit ethernet adapter and Bluetooth.

The absence of a HDMI (HD multimedia interface) digital video connector with the cheaper console might cause problems for users who want to use the built-in Blu-ray Disc drive to watch HD movies. Movies can be encoded to allow HD playback only through an HDMI connector, so without it users might have to make do with a standard-definition picture on movies.

Sony also announced a controller for the PlayStation 3. A mock-up the company has been showing was criticised by gamers, and Sony now says it will offer a wireless Bluetooth controller with a motion-sensing ability that resembles the current controller.