Oct. 9 (Bloomberg) -- Sony Corp. will cut prices of the PlayStation 3 by as much as 10 percent in Japan to narrow Wii maker Nintendo Co.'s lead in the market for the latest generation of game consoles.

The world's largest maker of game players will price two PlayStation models at 5,000 yen ($43) less, with the cheaper version selling for 44,980 yen, the Tokyo-based company said in a statement today. A third model with 40 gigabytes of storage will begin selling for 39,980 yen in Japan on Nov. 11, it said.

The move will test Sony's ability to gain market share after the company trimmed the U.S. price of the PS3 and said it will sell a less expensive model in Europe on Oct. 10. Since its release in November, PlayStation 3 sales have trailed those of the cheaper Wii and Microsoft Corp.'s Xbox 360.

``The market expected a price cut of 20,000 yen,'' said Koya Tabata, a Tokyo-based analyst at Credit Suisse Group. Sony could have cut the price by as much as 10,000 yen because of lower costs of producing the Cell chip that runs PS3 consoles, he said.

Tabata has an ``outperform'' rating on Sony.

The reduced price tag of 44,980 yen applies to the PlayStation 3 model with a 20-gigabyte hard disk, while the 60- gigabyte version will be sold for 54,980 yen.

Unlike the two other models, the new 40-gigabyte console won't be compatible with games for Sony's earlier PlayStation 2 machines, the company said.

Sony is keeping its PlayStation 3 shipment target for this year, Satoshi Fukuoka, a spokesman for Sony's games unit, said today. On July 26, Sony said it expects to ship 11 million PS3 machines in the year ending March 31.

Sales Promotion

To promote sales, Sony will give high-definition Blu-ray discs of its ``Spider-Man 3'' movie to the first 200,000 buyers of the PlayStation 3, which can play films based on the format.

The Wii, which doesn't have a hard drive, retails for 25,000 yen in Japan and comes with a motion-sensitive controller that can be swung like a tennis racquet or thrust like a sword.

Sony sold 66,444 of the PlayStation 3 in Japan in September, lagging behind sales of 168,220 Wii machines, according to Tokyo- based researcher Enterbrain Inc.

Shares of Sony rose 0.5 percent to 5,820 yen at the close on the Tokyo Stock Exchange, while Nintendo's stock fell 0.5 percent to 62,700 yen. The company made the announcement after markets shut.

To contact the reporter on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net.

Last Updated: October 9, 2007 05:51 EDT