Sony Computer Entertainment will sell its forthcoming PlayStation 4 at $399 - $100 less that Microsoft's Xbox One.
At the Electronic Entertainment Expo, the gaming industry's annual US trade show, the company also announced that it would not try to restrict used game sales. The PS4 would also not require a persistent online connection.
"PlayStation 4 disc-based games don't need to be connected online to play or any type of authentication," Sony Computer Entertainment America President and CEO Jack Tretton said. "If you enjoy playing single-player games offline, PS4 won't require to you check in online period and it won't stop working if you haven't authenticated in 24 hours."
Competitor Microsoft has been Microsoft has been criticised for not divulging any details on whether it will allow buyers of its Xbox One to play second-hand software or not. Also, its new console, the Xbox One, has to be connected to the Internet at least once every 24 hours.
"The gaming landscape is changing with new business models and new ways to play," Sony Computer Entertainment President and CEO Andrew House said at the event.
The company also gave potential PS4 buyers plenty of games to look forward to later this year.
The company's Santa Monica Studios, the developer of the "God of War" franchise, introduced the steampunk thriller "The Order: 1866". Quantic Dream, the French studio behind "Heavy Rain" and the upcoming "Beyond: Two Souls", provided a comical glimpse at the fantasy "The Dark Sorcerer".
Shu Yoshida, president of Sony Worldwide Studios, said the company's studios have more than 30 PS4 games in development, including 12 brand new intellectual properties.
Sony also showed new footage from previously announced PS4 games like the superhero adventure "InFamous: Second Son," the auto racing simulator "Drive Club" and the sci-fi shooter "Killzone: Shadow Fall".
Like Microsoft, Sony is also betting big on social networking features.
The new version of its DualShock controller includes a "share" button that allows you to post gameplay footage and screenshots. Friends can watch as you play a game, and you'll even be able to let a pal take control of your game from afar if you can't get past a tough battle. The controller also includes a touchpad and a Move motion sensor that works with a camera placed near the TV set.
With inputs from Associated Press