Fornay acknowledged that the price may seem steep compared to previous consoles and Microsoft’s Xbox 360 which retails for €320, but he emphasized that that PS3 will be inexpensive when one considers that the console will also play Blu-ray movies.

Note: As we know from past experience, until Sony sends out the official press release regarding the pricing of their PS3, these numbers can change.

Source: http://www.europe1.fr via Arstechnica.com

Update: Fornay's comments are not an indication of PS3 pricing - Sony

[Comments made by Sony Computer Entertainment France boss Georges Fornay which appeared to indicate the price point for PlayStation 3 have been misinterpreted and do not allude to the price of the system, the company has told GamesIndustry.biz.

The idea that Fornay's mention of 499 to 599 Euro price ranges was an indication of the PS3's price point is "a mistranslation or misunderstanding of the discussion, which was actually focused on the relative value of PS3 as a Bluray Disc player," according to SCEE corporate communications director Nick Sharples.

The SCE France boss' discussion of the pricing on French radio station Europe 1 was focused on the fact that the PS3 would be priced very competitively compared to other Bluray products if it were to emerge at $500, but that this price point is well above the range of other game console products, according to Sharples.

"Mr Fornay explained that, with BD and HD functionality, PS3 at this price would be cheap for such functionality, but that current video games machines were significantly below this price," Sharples told GamesIndustry.biz.

"At no time did he suggest or indicate a specific price point or price range for PS3, and any reports that he did so are incorrect.

"He summarised by saying that PS3 would be expensive when one looked at the current price of a video games machine, at far below 500 Euros, but extremely good value when looking at the BD and HD technology inside," he concluded.

While Sharples' clarification of Fornay's comments doesn't actually shed any new light on the question of PlayStation 3's price point - the opposite, if anything - it does open up the possibility that the firm could be planning to introduce the console at a price lower than the 500 Euro / $500 mark.

When the company talks about "current video games machines," it is almost certainly excluding the Xbox 360 from the equation, and talking specifically about the PSP and PS2 platforms - with the implication being that the pricing will fall somewhere well above their price points (between 150 and 180 Euro) but well below the pricing of Bluray devices (between 600 and 800 Euro).

That's an enormous range, of course, but it does leave open the potential for the PS3 to launch at the 400 Euro price point - exactly the same space that was occupied by the Xbox 360 premium pack when it arrived late last year.] - Gamesindustry.biz