Los Angeles - Sony stunned Electronic Entertainment Expo (E3) showgoers by announcing plans to deliver its first handheld video game platform late next year.
Meanwhile, Microsoft announced at $20 price cut on its Xbox console from $199 to $179, effectively immediately.
Xbox bundles with the console a built-in hard drive and built-in Ethernet port.
Microsoft also announced the launch of its XSN Sports game brand for online Xbox titles. Among the first titles under the brand will be NFL Fever 2004, NBA Inside Drive 2004, NHL Rivals 2004 and Top Spin. XSN titles will enable online game players to organize leagues, build tournaments and prepare schedules from a central Web site.
The talk of the show was Sony's new handheld platform, called PSP, which will be based on a MiniDisc-like Universal Media Disc (UMD) format, comprised of a 2.4-inch optical disc sheathed in a plastic caddy. It will store video content using MPEG-4 compression. The device is slated to ship prior to the 2004 Holiday season, but pricing and marketing details will be announced later, the company said.
In addition to game playing, the device will have the potential to play other forms of entertainment content, including streamed content when connected to a network, Sony said.
Meanwhile, Sony said it plans to make its highly successful PlayStation 2 platform 'the entertainment center of the living room through use of sight, sound and voice,' in online gaming.
In other news, Sony said it would begin bundling an online network adapter with all PlayStation 2 consoles beginning this summer at the same $199 suggested retail price that was previously asked for the console alone. Called the PlayStation 2 Online Pack, the system adds a network adaptor (Ethernet/modem) for analog or broadband Internet connectivity. It will replace the existing hardware SKU.
Sony said that to date it has sold more than 600,000 network adapaters at $40 apiece to PlayStation 2 owners since August 2002. Sony said it has sold some 19 million PlayStation 2 consoles in the North American market to date.
Sony also announced the EyeToy -- a USB camera that uses motion-tracking technology to project player images on-screen. When used with a PlayStation 2 console, the device captures a player's body movements and transforms the images into on-screen interaction. It will ship in October at a $39 suggested retail price, and will include 12 mini-games based on music, puzzles, sports, and other original genres.
Also introduced was a USB Headset for the PS2, designed for use with Voice Over Internet Protocol (VoIP) and voice recognition technologies for online and offline games.
The headset can be used with such online PS2 games as SOCOM II: U.S. Navy SEALs, Syphon Filter: The Omega Strain, NFL GameDay 2004, NBA ShootOut 2004, and NCAA GameBreaker 2004.
Meanwhile, Sony said it has extended its partnership with software publisher Electronic Arts to make nine of its best-selling EA Sports franchises exclusive to the PlayStation 2 platform for the 2003 - 2004 season.
Sony also said it would simultaneously release of an internal 40GB hard disc drive with Square Enix's multiplayer online role-playing game Final Fantasy XI, which will be released by Sony in the first quarter of 2004.
Sony said some 50 titles will be added to the PlayStation 2 library by the end of 2003.