So, their solution is to make a PS3 that can't play PS3 retail games? Fucking brilliant.

When iSupply did their initial cost estimates of the PS3 at launch, the cost of the PS3 wireless module was $15.50.  It has surely dropped since then.

The difference between the 20Gb and 60Gb was $11 at the time.  Going from an 80GB to a 40GB will probably save you less that $10.

That is $20 at most savings for no wireless and half the size hard drive.

Initial Breakdown of PS3 component costs.

Welp, I guess that throws out a stripped down PS3 then. Looks like they really are screwed to stay expensive.

many of you fail to grasp that they already have a cripple version on the market the moment they took out the full bc and such

The reason Sony keeps making the hard drive size of the PS3 larger isn't necessarily to justify keeping the price where it's at. Hard drives have a price floor, regardless of their size. If Sony wanted to sell the 40gb again for some reason, they'd still be buying 80gb drives and they'd be cutting them down to 40gb with the firmware.

That's what happened with the original Xbox, actually. The hard drives were not the same size when the system hit EOL but Microsoft artificially limited their size to make them match up with previous models.

This is just another way of saying that people need to stop bringing up the idea of cutting the hard drive size to save money. It doesn't work.

This product, if it were to exist would sell for more than $400 dollars

According to the thing, it would be bundled with numerous games

It would need at least a 500gb harddrive to be a practical idea

Unlike the current PS3, retailers would not sell this at such a low profit margin. Like console makers, retailers sell consoles (and dvd players, printers, mobile phones etc) for cheap, because they make so much money off game, movie, ink cartridge, and phone credit sales. They would not bother stocking such a bulky item unless they could make $50 profit off it

Actually what they need to do is make a motion controller for the PS2 add a relatively superior yet inexpensive graphics card for it (ie. modernize the PS2's tech to the best it could be while still turning a profit with a $200.00 retail price) than what the PS2 currently has and call it the PSCommunity or something. Then halt all PS3 production until the ones currently in stores sell out. Sure they can make new games for the PS3 but only ones that they can make a buck on if they only sell 500,000 copies unless it is a big name game (They shouldn't waste tons of money on new IPs like Little Big Planet that they have no idea how the market will respond to it.  Games by their proven second parties can be gambled on a bit more). Then when they can afford to sell the PS3 for $250.00 and are making a profit on it gear up production for the PS3 again. There you have a workable ten year plan for the Playstation brand. Especially since they won't have to have a new console to compete technologically with the Wii's successor.

Unfortunately, you do not know what the price floor on their HDD's are, do you? Nor if they could still buy 40GB hard drives or not.  Regardless, it wouldn't save them much.  If they didn't have so many games with required installs, they could just strip the hard drive completely to drop the price, but since adding the hard drive is not mainstream knowledge to the average Joe consumer, that would never work either...

Again I say, Sony is screwed.

I already think the new ps3s are all gimped but people want things cheap so I can't blame sony for doing what they had to do to cut the price. However, removing blu-ray is just ridiculous because the ps3 won't even be able to play ps3 games? My cousin just convinced her mom to buy her a ps3 (she had a ps2). Her mom got the Uncharted bundle. She ended up surprised that it couldn't play ps2 games

I have the real version of the Kutaragi ps3 (the 60 gb). I have to say that I 'm not even sure I could buy the current ps3's being sold since I'm now used to what my version can do. I use my 60 gb to play all my games (ps3/2/1) and back up my saves on a 4 gb SD card conveniently hidden away. I can't even play my ps2 games on ps2 anymore because they look much better on ps3 and the wireless controller is an added plus. I also use the card slots that sony thought was useless.

That said, I really hope my ps3 doesn't break again because I don't know if sony has anymore 60gb's to replace it again and I certainly don't want any of the new models.

@Zlejedi: First off, the idea of the platform being PSN only could make it very profitable and in the end, that's the only thing they care about. You'd have everything on PSN available for download, no second hand costs and the platform would be bought only for the software available.
Games that doesn't require that much space could be released in PSN just as well as a boxed title. Bigger games would be available only for the more expensive, the current, model that plays BD. Of course, Sony would need to introduce the PSN points cards to retail to maximise the potential of the system.