Sony PlayStation boss Ken Kutaragi told press at the Tokyo Game Show that the price for the 20GB version would be reduced by 20% in the Japanese market, and also announced that an HDMI connection would be included on the console.

The price cut means that the 20GB version of the PS3 will be on sale for ¥49,980 (£226), but so far no announcements about price cuts for the US and European markets have been made.

In the US, the 20GB model has been set at $499 (£264), while the 60GB model will be $599 (£317). In Europe, the consoles will be €499 (£335) and €599 (£403) respectively.

In contrast to Sony’s next-generation console, Nintendo’s Wii has a recommended retail price of just $250 in the US, while the Xbox360 starts at $299.

However, neither of those consoles offer high-definition disc playback as standard, whereas both version of the PS3 feature a Blu-ray drive. The Xbox’s HD-DVD drive is a separate add-on.

With the announcement that the 20GB console will come with an HDMI connection, the only major advantages that the 60GB version offers is Wi-Fi connectivity, memory card slots, and a larger hard drive.

As the price cuts seem designed to drum up more enthusiasm for the console before the November launch in Japan, perhaps other announcements on pricing and features will be made closer to the European launch next spring.

In related news, it has also been announced that the PS3 consoles will support Dolby Digital 5.1 and Dolby TrueHD.