Gaming circles voiced disappointment in the development with popular blog Joystiq.com saying it amounted to more of a "clearance sale" than an actual price cut.

    Wedbush Morgan analyst Michael Pachter said in a research note that Sony had an estimated 2 million to 3 million 60-gigabyte models in inventory and that once they were sold out, it would lower the price on the 80-gigabyte version.

    "Although we think that Sony's public relations gaffe was unfortunate, we do not believe that the company has ill intent, and we expect the $499 price point to be maintained until early next year, when the 80GB model will likely be cut again to $399," Pachter said.

    The PS3 lags the Xbox and Nintendo's Wii console in sales. The Xbox, which launched in November 2005, has sold 5.6 million units in the United States through May of this year.

    The $250 Wii, with its unique motion-sensing controller, has become a surprise hit, selling 2.8 million units in just seven months after its November 2006 launch, compared with the PS3's 1.4 million units in that time.

    Microsoft's Xbox 360 comes in three models priced from $300 to $480. The most expensive model, the Elite, comes with a 120-gigabyte hard drive but lacks the PS3's high-definition DVD player, built-in wireless technology, and bundled game.