Well, it looks like Sony has taken the first aggresive step in the console war by cutting the price of the Playstation 2 from $299 to $199, matching the price of Nintendo's GameCube and putting a distant $100 between itself and Microsoft's Xbox. As reported at CNN.com, Sony announced the price cut of the PS2 and a likewise 50% cut of the already economical PSone to $49. While rumors of this cut had been expected for some time and most had been expecting an announcement at E3, it appears that Sony may have out-manuevered Microsoft, who was similarly considering a hefty price cut to compete with Sony.

Sony had previously stated that a price cut would happen in September, but this bold move seems to have forced the hand of their opponents. Since Nintendo had hinted at a possible price drop depending on what Sony's decisions were, expect an announcement from them soon. Likewise, expect Microsoft to tighten their belt and cut prices also.

And, it's not just the console that's getting cuts. Apparently, first party games and peripherals are seeing likewise cuts, already evident in online gaming stores like Gamestop.com. First party titles are getting cut to $39.99; the PS2 Dual Shock controller is getting cut to $24.99; and the Memory Cards have been cut to $24.99. Check out the Press Release from Sony for more information.

Why are they doing this? Are they afraid of losing their market share? With 30 million units shipped worldwide, Sony did this because they wanted to beat Microsoft to the punch and force the competition to change their prices to compete. Also, Sony wanted to garner the sales of those who were waiting on the older gaming system to finally drop in price. Plus, with the price drop, Sony's online Adaptor and External Harddrive, which will be released later in the year, might prove to be more attractive add-on sales to some shoppers.

Will we see similar changes from Microsoft and Nintendo? Most likely. Expect more news to come.

- - Kinderfeld