Sony has announced that it is cutting the price of its PlayStation 3 console from £250 to £199, effective immediately. The consumer electronics giant is also set to launch a new cheaper version of its PSP handheld console, with a price point of €99. An official pounds sterling figure is yet to be confirmed.

The PS3 was launched in 2006 and has now shipped more than 50m units, with sales rising considerably since the launch of a cheaper slimline machine in 2009. It is thought that larger retailers will cut the price even further, with supermarkets likely to go as low as £180.

The new price was revealed during Sony's press conference at the GamesCom event in Cologne, in which the company also made several game announcements – including Resistance: Burning Skies, a new version of the hit PS3 shooter designed specifically for PlayStation Vita and DanceStar Party, a dancing version of the company's hit karaoke series, Singstar.

The new, cheaper PSP, which removes the Wi-Fi functionality from the six-year-old handheld, surprised many in the audience. Following the announcement of the PlayStation Vita console at E3 this year, it was assumed that Sony would be retiring the older technology. Instead, the company is re-packaging the PSP as an entry level machine, bulking out its software catalogue with a range of reduced-price classic titles.

Speaking about the price cuts, Andrew House, president and CEO of Sony Computer Entertainment Europe said: "Our strategy is to provide the best quality entertainment experience at accessible prices. With PSP at €99, Vita starting at €249 and PlayStation 3 at €249, we feel confident gamers can enjoy the incredible games available on PlayStation whatever level of investment suits their budget."

However, some industry insiders have question the logic of fielding two handheld specialist games devices into a market that's being pressured by the rise of smartphones and tablet gaming. It's possible, the two will cannibalise each other's markets, or that the cheaper handheld will draw complaints about the price point of the more expensive machine.

"The problem is, while the new PSP price point makes that console very attractive, as a side effect it puts an unflattering light on the price point of the Vita," said Rob Crossley of industry news source, Develop. "I think the price of PSP now puts pressure on Sony to also reduce the price of Vita from £229 to ensure that it's attractive."

The timing of the PlayStation 3 price cut has also driven debate. "Sony is dropping the price point at a time when there's been no considerable pressure from retail to do so," said Crossley. "That's a big change from PS3's previous price drop."

Of course, away from retail pressure, there's another reason why a console manufacturer may cut the price of its current generation technology: an imminent hardware announcement. Sony has assured gamers that PS3 will have a 10-year lifespan, and it's likely PlayStation 4 is a few years away yet. But with the Tokyo Game Show taking place next month, and the games industry in an accelerated period of evolution thanks to the rise of social and mobile games, anything is possible.