What would you strip out to reduce the price that much? I'm not sure it's feasible. They certainly aren't going to sell them without hard drives with all the installs. MS can do it because they are not required (though that strategy has obvious drawbacks along with the low price benefits - plus if people upgrade to a hard drive, MS smartly has that market cornered. Sucks as consumers but great for business).

Never going to happen.

Last I heard they were losing money on the 120GB and making money on the 250GB?

Removing the HD would save them about $30 probably but dropping the price to $199 would cost them a further loss of $70.

(I could be totally out on Sony's cost's for HD's but I think $30 is probably in the ballpark.)

This

What Zark say. What exactly can Sony remove to lower production cost? They can't remove the HDD and a 60GB isn't that much(if it all) cheaper than the 250GB. HDD aren't like flash memory, there is a hard cost of at least 50$ on them and don't cost a lot more as they become bigger. Their is a reason why the 360 don't have one while the Xbox did. They can maybe remove the Wifi, do what MS do now with the arcade and give out the cheap cable instead of the costly one(oh the irony!) but it won't account for the 100$ price difference. Other than that they can't do much, the BD drive is going to drop in price but it's going to take time, same for the Cell, and as I say the HDD is an hard cost and is not going to become cheaper just bigger.

Wait, isnt the Slim their "arcade"?

No.

The Slim is a scaled down PS3, not a stripped down one.

I think they should put the price back up to $599 and put in a solid state drive :)

wont happen till late 2011-2012

I cannot understand why they have 250 and 120gb on slim ps3. I still use the 40gb HDD and i have 23gb left after playing 12 games. If you have a computer, you dont need big space in the ps3.

I don't know what games you are playing, but I have had to delete a lot of game data from my HD as it was too full.  hate those 5GB installs :(