Despite Sony officials were denying recent price drop rumors stating that the company had no immediate plans for one, the console maker today officially confirmed it has cut the price of its 60GB model of the PlayStation 3 by $100, bringing it down to a $499 price point - only $20 more than the most expensive version of Microsoft's Xbox 360 but twice the price of Nintendo's Wii console.

In addition to the much needed price drop, Sony announced that a new PlayStation 3 model with an 80GB hard drive, packed in with a full version of racing game MotorStorm, is expected to hit retail shelves in August for $599.

"Our initial expectation is that sales should double at a minimum," Jack Tretton, chief executive of Sony Computer Entertainment America, said in an interview. "We've gotten our production issues behind us on the PlayStation 3, reaching a position to pass on the savings to consumers, and our attitude is the sooner the better."
The PlayStation 3 has lagged in sales behind rival consoles since its launch. Nonetheless, Sony's move comes as Microsoft's Xbox 360 is inundated with reports of widespread product failures, allowing Sony a good chance to gain customers. Microsoft announced last week that it would extend the 360's warranty to 3 years, spending up to $1.15 billion to repair the machines.