This does sound like a made up rumor. But hopefully, we do see both a PS3 and 360 slim in 09.

Maybe sony would like to get their Slimline model out before any Microsoft one.

This.

 lol, sure

Wii power > Cell and Blu Ray

Hmm good way to reduce size and costs would be to replace HDD with SDHC flash card (8 or 16 gigs for installs) and allow usage of external drives as storage.

if this is true im happy ill finally be able to get my PS3 =)

we're all expecting the slimline ps3 but an Easter release seems a bit unreasonable. i think they need to shrink the chip set further before they consider releasing it or their cooling system won't be sufficient.

my memory is foggy on this one. was the ps2 cpu and gpu combined before or after they released their slim model? was it combined at all or am i making up memories?

They were.

 Lol, I didn't expect Xbox 360's to be sold just 70 days after production began.......but it did.

No, they're not going to shrink the PS3 until everything inside is 45nm high-k. The plastic casing and location of the PSU are the least of Sony's problems in manufacture.

Step #1 - Reduce the size of all the processors. Less wattage = less heat = smaller power supply required. These steps, all by themselves, will shave A LOT of money off the cost of the PS3 and additionally result in it weighing half as much as it does now. Also, IBM shifting from 65nm SOI to 45nm high-k means better yeilds, which equates to cheaper Cells. IBM HAS BEEN MAKING 45nm high-k Cells since Feb of this year. Where do you guys think they all went?

Step #2 - Reduce the size/wattage/heat equation by shrinking all the processors 35-40% and you reduce the active cooling required to run the system. This means less copper (copper = EXPENSIVE) and fewer fans (fewer fans = fewer moving parts). All of this also results in better reliability. Better reliability = fewer warrantied returns. How important is that? Nothing eats into profit like giving away consoles for FREE, and paying the shipping both ways to boot.

Step #3 - Smaller components all around = fewer nuts & bolts & screws to hold it all together = quicker and cheaper to assemble. Yes, when you have plans to build 100M consoles or more over the course of ten years, EVERY SINGLE screw costs money. A penny on a screw here, a nickel for a hinged plastic door there, all of a sudden you've got ten billion dollars in savings by shaving $100 off the next 100M consoles you plan on making.

Step #4 - Half the weight + half the size means Sony can freight and store twice as many for the same price. Cheaper packaging and cheaper palletting. Stores can now also stock twice as many consoles since they require half the shelf space.

Sony went to work on the Slim PS3 the day they finished engineering the existing PS3, which is to say, they had already started before the current PS3 ever hit retail shelves. I wouldn't doubt that Sony has a functional, finished version of the slim PS3 in their R&D labs, and they've probably had it for quite some time. All that though, DOES NOT substantiate this rumor, which ammounts to some guy in a parking lot in Russia claiming he works for Sony and heard from another person that heard from another person at Sony that this was a done deal.

I'm 110% certain Sony HAS a slim PS3 *somewhere.* Doesn't mean any of us are going to get one in March '09 (or whenever).