At last, the much awaited price cut of PS3 consoles has announced by Sony. The price of PS3 consoles has been curbed worldwide except in Japan. And, upgraded versions of the consoles with 120 GB hard drives are going to hit the market. Sony also announced that it will stop manufacturing the pricey models to give space to the new models.

The Japanese electronics maker introduced a revamped, slimmer version of the PlayStation 3 on Wednesday, raising its hard drive to 120 gigabytes from 80, and lowering the price by about $100 worldwide.

Sony cut the price of the current model to the same price as the new model – $299 in the U.S. from $399, and in Europe to 299 euros from 399 euros, but kept it unchanged in Japan at 39,980 yen ($420).

Shawn Layden, president of Sony Computer Entertainment Japan, the company’s gaming unit, told reporters the new model will go on sale in Japan Sept. 3 for a lower price of 29,980 yen ($315).

Sales of video games and consoles have been hit by the global slowdown, and speculation had been rife about a PlayStation 3 price cut.

The price reduction is coming ahead of the critical year-end shopping season, when game makers rake in most of their sales for the year.

Sony desperately needs a boost. The maker of Bravia flat-panel TVs and Cyber-shot digital cameras lost 98.9 billion yen ($1 billion) last fiscal year, its first annual red ink in 14 years. It is forecasting an even worse 120 billion yen ($1.3 billion) loss for the fiscal year through March 2010.

Sony has sold more than 23.7 million PlayStation 3 machines around the world since the machine went on sale in 2006, but their sales have fallen behind rivals.