Sony rolled out the latest version of its blockbuster games machine in Japan in a three-way showdown with Microsoft Corp.'s Xbox 360 and Nintendo Co.'s upcoming Wii in the nearly $30 billion video-game market.

Sony, which has dominated the game market over the past decade, packs the PS3 with its cutting-edge technology including a Blu-ray high-definition DVD player and the Cell microchip, dubbed a "supercomputer on a chip". The advanced functions and components guarantee lifelike graphics to please hard-core gamers. But they come at a price.

Sony, which calls the PS3 its most important strategic product of the year, plans to sell a basic model for 49,980 yen ($424), almost double the price of the Wii and 26 percent higher than the Xbox 360. Still, Sony is expected to rack up a loss for every PS3 it sells, and the electronics maker forecast an operating loss of 200 billion yen at its game unit for the year to March.