Remember that rumor that the PS3 would get a number of things cut from it to make a 'Xbox 360 core' like SKU that would retail for $399? Well, Kotaku has recently posted a story that Xbox Director of Technical Strategy Andre Vrignaud has wagered to N'Gai that Sony will create a stripped down PS3 this holiday season for $399.

http://kotaku.com/gaming/addicts/microsoft-bets-ngai-again-ps3-will-be-399-this-year-282303.php

"..you're going to see the creation of a new, low-end SKU this holiday. It'll likely remove integrated WiFi, memory card reader, and most controversially, all backward compatibility. (Remember, there's still some back-compat hardware in even the new "software only" back compat SKUs; removing the remaining CPU is a significant cost savings.) You'll see a new WiFi dongle made available. And finally, this low-end SKU will likely come with a smaller 40 GB hard drive. The low-end price will be set at $399, with the higher-end 80 GB SKU dropping to $499."

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The rumor just sounds like they'd be bringing back the old 20gig PS3 and adding an extra 20gigs as well as all the current hardware revisions to lower the costs and selling it for $399.

Kotaku had this to say, "Reading between the lines, Vrignaud is implying that Sony will emulate Microsoft's strategy, creating an SKU very similar to the Xbox 360 itself. And given that Microsoft is most certainly tracking Sony manufacturing trends, this guess could have more clout than initial gut reactions would warrant."

So, could Microsoft bring that rumor any closer to believability? Or could it be merely more hot air between execs and companies?

I think it's not true that BC comes for free in the new PS3 models. The GS is still included, not emulated, so if they want to save every penny, they can remove it and goodbye BC.

I don't think it's beyond Sony to launch a 40 GB model. They're clearly not worried about how stupid their decisions look. If they launch it, they'll announce it as a comeback of the 20 GB model, to "give customers more choice, and now upgraded to 40 GB for downloading content from the network!"

I was under the impression that they were leaving otu the EE inthe 80GB already BUT leaving the PS2 GPU. They could further limit BC by taking out the PS2 GPU altogether and narrowing the cost of production significantly. $20 GPU $20 Wifi $5 and another $10 on the HD or $55 cost(only a rough guess) reduction take a $45 hit off one hundred and increase user base hoping they buy games.

 The PS3 absolutely MUST get its user base up while it is still in the same ballpark price wise as other Blu Ray players unless they plan a drastic drop to $199 by next July.

Cool, I was about to ask about that. That clarifies that better, thanks.

This would make perfect sense for Sony. What they are doing is releasing a $400 dollar BR player with the PS3 name. People looking for a BR player for the holiday season will pick up the cheapest one available, which happens to be a PS3. Therefore, Sony sells a lot more PS3s.