Sony has cut the price of its BDP-S300 Blu-ray player in America by chopping $100 off the price to $499. This reduction makes it cheaper than the PlayStation 3, currently priced at $599.

The explanation from Sony is that with increased demand for the Blu-ray format comes reduced production costs and therefore they have been able to pass on these savings to the consumer.

It's a curious move from Sony. One of the big selling points for the struggling PS3 was that although obviously primarily a gaming console, it was the cheapest Blu-ray player available on the market. By reducing the price of their standalone Blu-ray player they have effectively taken away one reason to purchase the PS3.

Toshiba recently reduced the cost of their HD-A2 budget HD DVD player to just under $300 as part of the HD DVD group's spring promotion.

Recent reports suggest Blu-ray has definitely got the upper hand over HD DVD. It's pure speculation, but perhaps Sony has sensed some serious weakness from the HD DVD team and are moving in for the kill via a price showdown as a final battle in the high-def format war.