Amid a period of slowing sales in the video game industry, Sony Computer Entertainment announced a slimmed-down, less expensive version of its pricey gaming console, the PlayStation 3. The new system, offering a 120GB hard disk drive, will be available in North American stores Sept. 1. Also in North America, the price of the PS3 with a 160GB HDD will be reduced to $399 Aug. 18.

Sony said the internal design architecture of the new PS3 system, from the main semiconductors and power supply unit to the cooling mechanism, has been completely redesigned in order to craft a more compact console. Compared with the very first PS3 model with a 60GB HDD, the internal volume as well as its thickness and weight are trimmed down by approximately two-thirds. Furthermore, power consumption is cut by two-thirds, helping to reduce fan noise, the company said.

The new PS3's storage size has increased from 80GB to 120GB, and the console also doubles as a Blu-ray high-definition DVD player, which resulted in what many thought to be an astronomical price point of $600 when it debuted in November 2006. Concurrent with the release of the new PS3 system, SCE will modify the PS3 brand name from "PLAYSTATION 3" to "PlayStation 3" and introduce a new "PS3" logo, which is engraved on the surface of the new system.

System software will also be upgraded to Version 3.00 on Sept. 1. The update adds various user-friendly features such as the "What's New" screen, where users can browse the new items available in the PlayStation Store as well as their recently played games directly on the XrossMediaBar (XMB), with shortcuts to each piece of content. Sony said the PS3 will evolve continuously with system software updates.

The new PS3 system is also equipped with the Bravia Sync feature. By connecting the new PS3 system and a Bravia TV with the HDMI cable, users are able to directly operate the XMB on PS3 using the TV remote control. Other functions include "System Standby" that will automatically turn off the PS3 system when the TV is turned off.

In addition, Sony noted the revamped PS3 will sport a new look, keeping the curved design of the original console but with a textured surface finish, giving “an all new impression and a casual look.”

Sony’s long-rumored price cut, which many analysts said was necessary to make the console more competitive with rival systems from Nintendo (Wii) and Microsoft (Xbox 360), positions the company for growth in the upcoming holiday season. The company is also touting a number of new game titles, including God of War 3 and Gran Turismo 5, among others.

Also mentioned were the 27 million registered accounts around the world on the PlayStation Network, which offers more than 15,000 pieces of digital content, ranging from game titles, trailers and demos to more than 15,000 movies and TV shows via the PlayStation Store.