Did Anybody read that posted artikle:

"Insider whispers in the past week have suggested that Sony is planning to announce a new $400, 40GB model PS3 that will release in time for Christmas (in the US, at least). Now, on the day before the PlayStation maker's Tokyo Game Show conference, GamesRadar has learnt that a cheaper model is indeed on the way, although it will have a reduced feature list compared to the 60 and 80GB models."

"With the failure of the 20GB PS3 in mind, it would hardly seem like a wise move by Sony to follow its template too closely. After all, if rumours of a price cut for the 80GB model ring true ($500 down from $600), the difference in price between the 40 and 80GB models would be identical to the gap between the cost of the 20 and 60GB models when they launched. A saving that early adopters snubbed."

The 20 gig is still availible in Japan, maybe they also get 40+80gig version of the PS3 and a price cut there?

The CPU in the PS2 was dubbed "The Emotion Engine". The GPU in the PS2 was called "The Reality Synthesizer." Sony took the emotion engine out of the Euro and 80GB PS3s but from my understanding the newer PS3's still contain the PS2 GPU aka The Reality Synthesizer. 

yeah i just don't understand these rumors. Sony wasn't willing to take the huge losses from the 20 gig and only released a small amount of them before discontinuing them. The cost difference was something like $20, but most of that came from the wi-fi. Now you are saying they aren't even getting rid of the wi-fi, meaning the cost to make the 40 gig is almost exactly the same as the 80 gig.

Perhaps this christmas will be just like last and we'll see a 20 gig like model that they advertise and only ship like 5,000 of them, because that's the only way i see it happening.

 A little extreme here, Fishy. Multiple SKUs aren't necessarily a recipe for failure. Let's leave it at this:

1) Sony would definitely be losing even more money if they were to drop the price for Christmas.

2) Sony would increase market share if they were to do this.

We'll see how they implement it. 

It would make more sense to come out with a larger HD (say 200GB) and price it at $599 and then move the 80GB to $499. A 40GB version at $399 would be great for the consumer, not for Sony.

 i think what fishy means is that why would sony strip down the system and still take a loss when they could take a miniscule loss and probably sell a shit ton more if they just dropped the 80gb down more.

This would only (really) make sense to me if Sony also dropped the Blu-Ray movie playback, forced people to buy a remote control which included the licencing fee, took a noticeable loss, and matched the price of the XBox 360 priemium.

So... what's the point of keeping one but ditching the other? That would mean they'd have to bin a whole new part as the GPU and CPU have been on the same chip since the PS2 Slim came out.

The best way to drop the cost of the PS3 is to produce and sell a ton of them.  Everything inside the PS3 has to stay now...  you can't cut anymore fat on components without using manufacturing techniques to drop your cost.  The more systems you produce, the less they cost due to the lower overhead associated with the design and manufacturing plant changes.   The better you get at making the chips, the less it'll cost you in wasted yields.  This is the approach Sony wanted to go and may still pursue. Sony needs to ramp up it's plants, cut down on the size of etching it's using for it's chips so it can produce more chips per die. If you built a plant to produce cell chips at 90nm and expected to produce 20 million of the chips to lower your overhead cost but only ended up producing 10 million, you'd lose more money if you dropped your plant down to 65nm as you never recovered the cost of investment in your original configuration.

I think this is one of the many reasons why Sony is looking to sell off it's plant.  It doesn't have enough uses for it at 90nm and refuses to pay to upgrade it to 65 and 45 nm as that would mean they'd require HUGE sales increases to keep the plant busy.  I also see this as being the end of the idea that Cell will become mainstream in other appliances as there is no demand for the cell chip outside of Sony and some science folk.

It could just be a drop in production costs. If the 80GB still comes with Motorstorm, than the price difference does make some sense. Remember the difference between the 20GB and the 60GB? The lack of card readers and wi-fi combined with the smaller HDD were not near a $100 difference in cost. Considering the fact taht tthey just sold off $1 bil. worth of shares in their insurance division, they could just be taking the losses.

@Viper: Sony also said that they'd be going with only 1 SKU back at e3'05. Then e3'06 came along and everything changed. Why couldn't that happen again?

who knows, maybe sony is desperate enough to go to the extremes with their lead-loss strategy. anyhow, if it's true, both 360 and ps3 stand to make no money this gen.