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Considering how much the $500 price tag helped, when it was still ludicrously expensive, and you could already buy it for $500....

Ehhhh....

I don't see how anyone could doubt the power of this price drop.

I doubt it, and here's how:

Reports of the 40gb in Europe so far say it's a flop. They've stripped the second most important feature from the system (the first being compatibility with PS3 games), and killed any positive buzz they might have generated with this new model. Once again, they've disastrously misread what their customers want.

I don't think this is the move that's going to save the PS3.