Sony unveiled its next generation console priced at $399 on Monday, undercutting its rival Xbox, which had been launched just a few hours earlier, by $100.
Both Sony's Playstation 4 and Microsoft's Xbox One were launched at the annual E3 gaming console convention in Los Angeles. Gaming fans took to twitter minutes after the launch of Sony's latest console predicting a "price battle".
Keith Stuart, who has worked for video game industry bible Edge Magazine, Official PlayStation Magazine and Pocket Gamer tweeted:
(Read More: Will the PlayStation 4 Give Sony the Boost It Needs?)
According to data from New York based consumer market research firm NPD, the Xbox 360 was the bestselling console in the U.S. at the start of this year and has held the top spot for 24 consecutive months. But this year will mark the first time the two new consoles will go head-to-head on Christmas sales, as previously consoles have always been launched in different years.
The Xbox One will go on sale for $499 in November this year in time for Christmas. Sony was more vague about when its machine would go on sale, saying it would hit shelves "this holiday season".
Sony said it is currently developing more than 30 PS4 exclusive titles, with 20 of them planned to release within a year of the launch of the PS4 system.
Jack Tretton, CEO of Sony Computer Entertainment America said the launch would make the PS4's ecosystem of games and services stronger and more vibrant.