Sony is to sell its new PlayStation 4 console for €100 less than Microsoft’s Xbox One, as competition for gamers' pockets intensifies ahead of the industry’s busy period.

Sony said it would sell the new PlayStation for €399 when it launches late in the year, shortly after Microsoft announced a €499 price tag for its next Xbox, which goes on sale in Ireland in November.

Sony also drew cheers from the audience at the Electronic Entertainment Expo (E3) in Los Angeles when it said the PS4 would run second-hand games and did not require an always-on Internet connection.

Microsoft had earlier elicited groans from gamers when it announced restrictions on used games for the Xbox One and said players had to log onto the Internet for authentication.

"The PlayStation 4 won't impose any new restrictions on used games," said Jack Tretton, president and CEO of Sony Computer Entertainment America as the audience whistled and applauded.

Microsoft and Sony hope the consoles will attract new fans and retain users who are increasingly playing games on smartphones and other mobile devices, gradually diminishing the €50 billion video game business.

Both companies are also offering more entertainment options.

The Xbox 360 is currently the best-selling gaming console in the United States, but global sales are almost on par with the PlayStation 3.

The new Xbox and PlayStation are both pricier than the €300 Wii U, which Nintendo launched late last year but which has sold poorly, partly due to a dearth of new gaming titles.

Nintendo is expected to announce new games for the device at the E3 today.

"It's a very compelling price... given the entertainment PS4 will provide to gamers," Sony Computer Entertainment President and CEO Andrew House told the E3 event.

The Xbox One is costlier than the current Xbox 360 and includes a Kinect motion sensor for hands-free game playing.

Microsoft also announced several exclusive game titles, including a rendition of 'Minecraft' and a new instalment in the popular 'Halo' franchise, which will be released in 2014.

The device will go on sale in 21 countries before the year-end holidays, the company said.

Yusuf Mehdi, an executive at Microsoft's interactive entertainment unit, did not set any sales targets for the new Xbox.