Sony has broken its silence and named the launch date and the price of its hotly-anticipated PlayStation 3 console.

Two versions of the games machine will be made available, starting at $499. It will first go on sale in Japan on November 11, followed by North America, Europe and Australasia on November 17.

The announcement caps much speculation about the pricing, sparked when Ken Kutaragi, president of Sony Computer Entertainment, said last year that the machine would be expensive.

There's a reason for the high price. The console is based on the new Cell processor, which has cost Sony, Toshiba and IBM billions of dollars to develop. It also includes an optical disc drive for the new Blu-ray Disc format.

The disc drive will likely cost around $350 per unit and the Cell processor as much as $230 initially, according to an estimate from Merrill Lynch. The brokerage firm estimated the production cost of each console would be as high as $900 to begin with.

Sony said last month that it expects its game division to lose ¥100 billion in the year to March 2007 because of start-up and promotional costs associated with the PlayStation 3. It expects to ship six million of the consoles during that period.

The console includes a 60GB drive, a memory card reader, a WiFi adapter and a digital high-definition video connector. Sony will also offer a lower-end version of the console for $499 with a 20GB drive and none of the other features. Both versions will have USB, a Gigabit Ethernet adapter and Bluetooth.

The absence of a HDMI (high-definition multimedia interface) digital video connector with the cheaper console might cause problems for users who want to use the built-in Blu-ray Disc drive to watch HD movies. Movies can be encoded to allow HD playback only through an HDMI connector, so without it users might have to make do with a standard-definition picture on movies.

Sony also announced a new controller for the PlayStation 3. This will be a wireless Bluetooth controller with motion-sensing.