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chenguo4 said:
It seems that's what MS is doing. Come with a gimped system that seems cheap, but make money off "peripherals" and other optional things (live) that are in actuality necessary.

So, the console seems cheaper, when it's really not, and you get people to commit.
steven787 said:
Switch to a wired controller instead of Bluetooth.
Make the drive tray-loading or pop-up(like the PS2 slim) instead of slot.
Switch to regular buttons instead of those fancy schmancy touch sensity marks.
Switch to a basic matte-plastic case instead of glossy.
Take the power supply out, and use a brick like the 360.
Two USB ports.
No optical out (not very realistic).

 

If you look at my list there are a bunch of things Sony could have done/could do to cut costs without hurting the functionality. (Except bolded)  That bluetooth controller is a big cost and should be bumped out of the cheaper version, not many people will care.

Edit: With my cost cutting the PS3 would still have WiFi, Bluray, and batteries built into the extra controllers people can buy; it would still be much more functional than the 360.



I would cite regulation, but I know you will simply ignore it.