After Microsoft announced it will cut the price of its Xbox 360, yesterday was Sony’s turn to wow the gamers by announcing a new PS3 version.
During the company’s press event at E3 2008, Sony Computer Entertainment America President Jack Tretton took the stage to announce that the current 40 GB PS3 will be replaced by a new $399 80GB version.

In time all the other PS3 models that are currently selling in the US will be replaced by the new version. According to Sony, the new model will have the exact same functionalities as the 40 GB version and basically only the storage was upgraded. Sony is selling already a 80 GB PS3, which was released lat year in August, abut unlike the new, announced model, that one has four USB ports, Super Audio CD support, Flash card readers, and PS 2 compatibility.

This model will be phased out in September so what we have here is basically the current 40 GB, which has two US ports and no PS2 compatibility, with a larger hard drive.

Sony’s move follows after on Sunday, Microsoft has confirmed that it has lowered the price of its Xbox 360 Pro with $50 and. The model, which includes a 20 GB hard drive, will sell starting today for $299 instead of $349 and will be discontinued.

Also, Microsoft unveiled an upgraded version of Xbox 360, which features a 60 GB hard drive and will go on sale in early August for $349.
Besides the new 60 GB version, Microsoft will continue to sell the Xbox 360 Arcade version, which comes with a 256MB memory unit and five Xbox LIVE Arcade games for $279 and the premium Xbox 360 Elite console that includes a 120GB hard drive for $449.

Albert Penello, Xbox director of product management at Microsoft, explained that the new version was introduced to meet the demand of the customers for more storage space.“No one device offers the depth and breadth of entertainment that Xbox 360 can deliver, and now you'll have three times the storage to manage all that great content,” he said.

The race toward the digital reason is also the reason why Sony upgraded the hard drive of its PS3. During the same E3 event, Sony unveiled its movie and television sales and rental service which went live at the PlayStation Network.The content is provided by Fox, MGM, Disney, Paramount and Sony Pictures and the TV shows are available for 1.99 dollars per episode, while the movies can be rented for prices between 2.99 to 5.99 dollars.  Those customers who wish to buy a movie will have to spend 9.99 or  14.99 dollars.

The feature with which Sony hopes to differentiate its movie service from similar offers is the possibility to transfer to content to the PSP for viewing on the go.

However, in the past years Sony’s attempts in the online content distribution have not been so successful. In 2007, Sony announced it was pulling the plug on its Connect store, because the ATRAC format failed to become an alternative to MP3 and other formats. Sony’s Connect music store was launched in 2004 as a response to iTunes Music Store, but it was closed in March this year. In addition, Sony sold Movielink, a former joint-effort of Sony, MGM, Paramount, Universal and Warner, to Blockbuster. Currently Sony has an installed base of more than 5 million PS3s only in the United States and close to 12 million PSPs.

Also, Microsoft announced during E3 an exclusive partnership with Netflix Inc. that will give Xbox 360 users instant access to more than 10,000 feature films and television shows.

Xbox 360 will be the only game console to offer this movie-watching experience, available to Xbox LIVE Gold members who are also Netflix subscribers at no additional cost.So it seems like, besides games, now there a new battlefront for the gaming consoles: the movies and TV shows. Stay tuned to see who will wins the fight.