Sony will slash the price of its PlayStation 2 console from £269 to £199 from Friday 28 September.
The company said it could make the cuts thanks to production economies of scale, and promised a Eu140m marketing spend to promote the console and forthcoming software releases.
David Reeves, senior vice president at Sony Europe, said: "It's not just about the price. In the run up to Christmas, we will see a wealth of games launched."
Sony or third-party publishers are scheduled to release titles exclusive to PlayStation 2 - such as This is Football 2002, Time Crisis 2, James Bond ... Agent under Fire and World Wrestling Federation Smackdown!: Just Bring It - in the run up to Christmas.
More than 90 titles will arrive before Christmas, the firm said. Some 110 PlayStation 2 titles have been released since its launch.
Sony claims to have shipped over 17 million PlayStation 2 consoles worldwide since its launch last year. Nintendo and Microsoft are planning to launch rival games machines in the US this November and in Europe next Spring. Both are expected to carry street prices higher than £199.
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