Sony last week announced today it was cutting the price of its failing PlayStation 3 games console. Sony made the move in the face of poor results for the PS3 which will face stiff competition from Microsoft's Xbox 360 and the popular Nintendo Wii in the all important build-up to Christmas.

Indeed, worldwide the Sony Playstation 3 has sold only around half as many units as the Wii and the Xbox 360, both of which have enjoyed sales of more than 10 million units.

Sony has reduced the basic 60GB PlayStation 3 from £425 to £349. And Sony is also releasing a new 40GB model of the console, for £299. The 40GB PlayStation 3 has no backwards compatibility and half the usual number of four USB 2.0 ports. Both cut-price versions of the PlayStation 3 will be available in the UK from Wednesday 10 October.

The price cut means that the 40GB PlayStation 3 is the same price as an Xbox 360 Elite, but that console has a 120GB hard drive. The Wii costs only £179, but doesn't support high definition graphics and cannot act as a DVD player and is pitched more as a fun toy than a high-end gaming platform.

Click here for reviews of the Sony PlayStation 3, Microsoft Xbox 360 and Nintendo Wii

David Reeves, President of Sony Computer Entertainment Europe, said: "The introduction of the new PS3 has been the result of extensive research into the entertainment needs and preferences of the next generation of PS3 owners.

"It has allowed us to deliver an extremely advanced, yet highly affordable High Definition entertainment system, configured to the needs of the next generation of European PS3 owners.

“PS3 has always been the device of choice for the discerning gamer and entertainment seeker, and the new PS3 is more than ever the perfect High Definition entertainment system.”

"It is satisfying to be able to offer UK consumers the choice of two PlayStation 3 packages both now representing remarkable value,” said Ray Maguire, head of PlayStation UK.

“We have a brand new 40GB machine that represents an excellent entry point into the world of High Definition games and movies, and we have the fully featured 60GB machine being offered with two next generation gaming experiences at a highly competitive price.”