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Sony's thinking:

They remove all of those features and sell it for $400 in the holiday season. Will it sell? Perhaps not to too many gamers, but it will definitely sell to people looking for a BR player. It would be the cheapest on the market, PS3 numbers are inflated because of the PS3 as BR player sales, and they discontinue the 40GB soon after the holidays, in preparation for the REAL GAMING $400 PS3.

Simple as that. Sony does not do horrible numbers in the holiday season.