One important question is, given the current situation, how much of the cost reductions a slim PS3 would entail can Sony transfer into the retail price? I have a feeling they are quite satisfied (relatively speaking) with the sales numbers currently, so they might opt to improve their bottom line. Especially since a slim model would spur demand anyway, even without a price cut.

The casing and the labour(40$ Vs $6) required are much higher in the PS3 than the 360, so it would be wise to do a redesign of the product.

Just a redesign to save labour could net them around a $30 price saving which would justify the costs (1 year x $30 x $10M consoles = $300M cost savings)

A redeisgn could be practical some time in 2009  ( I would expect late 2009), but dont expect it to be much smaller as the heat is still the problem

Nidan

Exactly - why does the PS3 need a hardware revision so much earlier?

By the way, this constant doubt around "the new Nintendo demographic" doesn't make sense to me. The people that are currently buying PS2's, are the people who keep consoles alive so long, correct? Now ask yourself this - why are these people still buying PS2's, when the 360 is nearly just as cheap? If they cared about graphics, surely they'd pay a tiny bit more for that HD experience?

The PS2's main attraction is the massive game library, the graphics aren't very important. The current market leader, the Wii, has this, and it is the reason it will continue selling. The DS should have already taught people this "new demographic" isn't going anywhere.

would do wonders in japan(so i hear).

It is kind of ironic that the most advanced console needs the hardware revision the soonest. That in of itself says a lot.

 actually the HD isn't all that big, laptop hardrives are very small, im pretty sure they found enough space to cram it in. the processor (cell) is the size of your finger nail so thats not a problem. sony is a expert at making parts small, and they are eventually going to make the ps3 smaller. they did it with the ps1 and ps2, don't see why they wont or can't do it to the ps3

and i won't start to assume its true cause its from NG4, they made a article saying gears 1 would come to ps3, and we all know MS sign a exclusive deal for that game

The more advanced the console, the more room for improvement and cost saving with a hardware revision.  We may never see a Wii redesign it its lifetime.

we will see, doubt it though

 not really. MS has made hardware revisions too for the same reason, to lower the production costs. the changing from 100nm to 65nm process for their processors which sony did as well was to reduce the costs to make their systems.

the slim is just to make the ps3 cheaper to sell so they can drop the retail price, there is nothing ironic about this, its just pure smart business, every coporation does this. it has been done with VCR, dvd and blu ray players, it has been done with T.V's. do you know when VCR's came out it cost $300, and thats in 70-80 US dollars, imagine how much that is now.

@Kirby & Fishy-  ...