Microsoft's Xbox and Sony's PlayStation 2 will compete on even terms this holiday season; at least in terms of price.

GameSpot is reporting that in an interview with Reuters, Sony Computer Entertainment America CEO Kaz Harai said that Sony will increase production but not drop prices. We're very comfortable with the [$299] price point, Harai said. That puts two of this year's console competitors on an even financial footing, although the advantage for installed base and number of game titles goes to Sony, even if the Xbox has more powerful hardware.

Sony plans to increase production of the console to meet holiday season demand, from about 1.8M units per month to 2M units per month. When Microsoft posted the official list of launch titles, Ed Fries of Microsoft commented that Flextronics last Friday produced 27,000 units in one day. Operating at six days per week for about a month, that translates to about 648,000 units per month, about one-third of Sony's current production level. All in all, it may be much easier to find the PS2 this year than the Xbox-- and when you do find it, it will be at the same price and have more games to choose from. In order for customers to choose the Xbox over the PS2, there will have to be other factors involved-- like an overriding desire to play Halo.

Only Nintendo is attempting to compete on price this season, undercutting their competitors by $100 by pricing their upcoming GameCube at $199.

Worldwide, Sony has shipped 19M PlayStation 2 consoles, and it expects that by March of next year it will have shipped 10M in the United States.