Microsoft has responded to the the news earlier this week that Sony has cut the price of the PlayStation 2 to $99.99 in North America and €99 in Europe.

Speaking to GI.biz, Chris Lewis, VP of the Interactive Entertainment Business for Microsoft, is unconcerned by Sony's actions.

"This move from Sony at the end of the PS2’s life cycle is not unexpected," he said.

"We believe, however, that the future lies in the growth of current generation consoles and Xbox 360, as the fastest growing games console last year, with sales up over 80 per cent, will continue to drive the market."

Analysts believe that Sony will attempt to drive PS3 sales with the announcement of a price drop shortly.