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E3 expo 2013: Sony reveals PS4 will cost $399 - $100 cheaper than the Xbox One and with fewer restrictions

New console will not require internet connection or authentication and will play secondhand software

Sony might have stolen a march on Microsoft in the race for gamers' hearts, unveiling a console with fewer restrictions on use - and $100 less on the price tag - than the Xbox One.

Company president Andrew House showed off the PlayStation4 last night at the E3 expo in Los Angeles, and revealed it will sell for $399 (£256).

He also revealed it will not require an internet connection for gaming or authentication and will play secondhand software - both unlike its rival.

The console will hit the shops by the end of the year, shortly after Xbox One's autumn release, costing  £349 in the UK, $399 in the US and €399 across Europe.

Mr House said: "The gaming landscape is changing with new business models and new ways to play."

The Japanese company announced the new PlayStation in February but waited until Monday to unveil the black cuboid machine, not dissimilar to the Xbox One.

The crowd applauded when Jack Tretton, president and CEO of Sony Computer Entertainment America, said the device would not restrict used game sales – a potential requirement of the Xbox One which has caused fan anger.

Tretton also said: "If you enjoy playing single-player games offline, PS4 won't require to you check in online period and it won't stop working if you haven't authenticated in 24 hours," a direct challenge to the Xbox, which needs to be online once a day.

Sony said it had more than 140 PS4 games in development, and gave previews of upcoming releases The Order: 1866, and Killzone: Shadow Fall.

Stephen Totilo, editor-in-chief of the gaming news site Kotaku, told the BBC: "Microsoft is going to need to look again at its price or explain why it offers better value, such as the inclusion of its Kinect sensor.

"Of course, in the short-term it may not matter too much because when new consoles launch, supply is typically limited and hardcore gamers will pay anything to snatch them up. But six months or a year later on it will make a difference and Microsoft may feel at that point that it needs to match price with Sony."