The latest stage in the console gaming war has started way before Sega's much hyped Dreamcast hits the streets in the US next month.
Both Sony and Nintendo have slashed the price of their gaming consoles to below $100 in a bid to ramp up sales before the Dreamcast, priced $199, arrives.
Sony said it would reduce the price of its Playstation video game system by 24 percent, to $99. Nintendo rapidly followed suit, saying it would drop the price of its Nintendo 64 console by 23 percent, to $99.95. The new prices take effect next week.
Sega's Dreamcast launches in Europe on 23 September, but neither company was willing to comment on possible pricing changes for Europe.
Sega, which has reported record advance orders for the Dreamcast in the US, said it was "not surprised and definitely not worried" by the price cuts.
"They are selling outmoded technology, so they have not got a choice but to sell on price," said a spokesperson for the company.
Sega was forced to cut the price of its Dreamcast in Japan earlier this year due to lazy sales figures. The company blamed a lack of software titles - a hurdle it claims it has now overcome.
Sony's price cuts may enable its four-year-old Playstation to surpass last year's sales of 7.5 million in the US alone. It will be the final burst for the system however. Sony plans to start shipping its next generation Playstation 2 in Japan by the end of the year and in the US and Europe in 2000.
As part of their sales push, Sony and Nintendo also announced plans to cut software prices. Sony said it will mark down several video games including 'Crash Bandicoot: Warped' to as low as $19.99, and Nintendo is dropping a small selection of titles to $39.95.
Sega is forecasting global sales of four million Dreamcast consoles from September through to March 2000, giving it an installed base of around five million units.
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