The PS3 will come in two configurations: one version with a 60GB hard drive that will , SCE President Kaz Hirai said.
Those prices are significantly higher than Microsoft's Xbox 360, which has two versions, one with a 20GB hard drive that costs $399 and another with no hard drive that retails for $299.
The announcement came on the eve of the Electronic Entertainment Expo (E3)--an annual gaming industry trade show taking place in Los Angeles this week.
In an interview with CNET News.com on Friday, SCE Executive Vice President and co-Chief Operating Officer Jack Tretton said, effectively, that the company believes consumers will pay whatever the next-generation console costs.
"People are going to perceive enough value" with the PS3, Tretton said, "that they're not going to consider the price to be a barrier to entry."
The PS3 is certainly a big technological leap over its best-selling PlayStation 2, which Sony said Monday had recently topped 103 million units sold.
The PS3, which is based on the Cell processor, will play CDs, DVDs and include a Blu-ray drive. It also includes built-in Bluetooth and Wi-Fi connectivity, as well as Ethernet compatibility. Further, it includes Dolby digital surround sound functionality and supports high-definition video up to 1080p.
The console also can run up to seven wireless controllers at once, and all PS3s will come with a built-in hard drive, either 60GB or 20GB.
Finally, it supports USB, Sony Memory Sticks, Secure Digital (SD) and CompactFlash.
In addition to announcing pricing, Sony also said the PS3 will hit store shelves in North America on Nov. 17, six days after its Japanese launch on Nov. 11.
Hirai noted that Sony is committed to shipping 4 million PS3s by Dec. 31 and another 2 million by March 31, 2007. That means--if customers are not put off by the console's high price--Sony could be in position to avoid the criticism Microsoft took for not being able to meet initial customer demand for the Xbox 360.
Meanwhile, Sony also showed off for the first time the PS3's controller--which looks much like that of the PS2, though it is silver rather than black.
How it differs substantially is that it includes technology that ties character movement on screen to that of players' hands. That is, as players move their hands around, the controller automatically senses the movement and translates it to character movement on screen.
That is a significant innovation that the Xbox 360 does not have. Nintendo, by contrast, has long said that the controller for its own forthcoming next-generation console, the Wii, would have built-in motion-sensitive technology.
Tuesday morning, Nintendo hosts its own gala press conference in Hollywood. Microsoft's press conference follows immediately afterward, also in Hollywood.
It is expected that, among other things, Microsoft will formally announce development of "Halo 3," the follow-up to its best-selling "Halo 2." It is also thought that Microsoft will
In any case, the PS3, at a minimum of $499, is likely to hit Sony pretty hard on the bottom line. That's because, as CNET News.com reported in February, it appears that the PS3's component cost will be at least $800.
Sony looks at PlayStation family consoles--the PlayStation, PlayStation 2 and PlayStation Portable--as having 10-year lifespans, and therefore, the company hopes that over time, component costs will drop enough to make a profit.
But in the short term, the consoles are likely to cost consumers significantly less than Sony is paying to make them, and that could squeeze the company as it pursues other initiatives.
Still, as the company made sure to point out during the press conference Monday, it is still selling millions of PS2s and PSPs and doesn't expect those sales numbers to drop anytime soon.
Indeed, Hirai said that Sony expects to sell an additional 10 million PS2s. And it hopes to sell another 12 million PSPs by the end of the company's current fiscal year, March 31, 2007, which would bring total PSP sales to 29 million.
Regardless, for Sony to finally unveil pricing for the PS3 was an important move because it will quiet speculation that has run rampant for months. It will also give consumers six months to get used to the high cost of the PS3, something the company clearly hopes will lead to high sales figures.
Meanwhile, Sony also showed off a plethora of games that will be available either at launch or shortly thereafter.
Among the publishers it showcased was Electronic Arts, whose CEO Larry Probst, appeared on stage and said that his company was working on 10 titles for PS3 including new versions of "Madden NFL," "NBA" and "Tiger Woods PGA."