Sony announced on Tuesday that it is lowering the price of its 160GB PlayStation 3 console to $249, down from the console’s original $299 price tag. In addition, Sony will now sell the 320GB version of the PlayStation 3 for $299 instead of $349. The Japanese consumer electronics firm also dropped the price of the system in Japan and in Europe. The move is likely an effort to tackle Microsoft’s Xbox 360 console, which has been the best-selling console in the United States for past seven months according to the latest data from The NPD Group. Recent rumors have suggested Sony is already working on the PlayStation 4, which could launch as soon as next year to compete with Nintendo’s Wii U and Microsoft’s next-generation Xbox.