New York - On Friday, the maker of the world famous video game console, PlayStation, Sony announced that it will start selling a new model of its video game console, PlayStation 3, with less built-in storage capacity, priced at 399 euros (276 pounds), in Europe on October 10.

The new configuration of PlayStation 3, which will also be available in the Middle East, Africa and Australia, will come with a 40-gigabyte hard drive. It will have the ability to access the Internet wirelessly.

Sony also announced that it would slash the price of its 60-gigabyte PS3 by 100 euros to 499 euros.

Sony introduced the PS3 with a 20-gigabyte model and the bigger 60-gigabyte model in last November in the U.S. market. However, the company discontinued the lower-capacity PS3 in North America due to strong sales of the higher-capacity model.

With the 40-gigabyte model, Sony hopes to spur demand for the PS3 that has been struggling since its launch against the rival Nintendo's Wii and Microsoft Corp's Xbox 360.

However, like the 60-gigabyte model, the 40-gigabyte PS3 will not be able to play games developed for the older PlayStation 2 model.

Sony however declined to comment on when it might launch a 40-gigabyte PS3 in the United States.

Wedbush Morgan analyst Michael Pachter said, “This thing being 100 euros cheaper implies very strongly that the U.S. version will be $399."