NEW YORK — After months of rumors and anticipation, Sony says it's slashing the price of the PlayStation 3 by $100 to $299.

Sony Corp. said Tuesday it will cut the price of the currently available 80 gigabyte PlayStation 3 effective immediately. It is also launching a slimmer, lighter model in early September that will also cost $299.

Sales of the PlayStation 3, which launched in 2006, have fallen behind its rivals. Video game software makers hope Sony's price cut will boost game sales ahead of the holidays. So far this year, the industry has seen as slump because of the recession and weak game release schedules.

Jack Tretton, president and CEO of Sony Computer Entertainment of America, says there is no question the consumer reaction to the cuts will be "phenomenal."