Fixed.

i'd like to buy a HDD-less PS3 for $199.99

then buy a 500GB HDD for $150 and stick it into PS3.

While a $399 PS3 is great for the consumer, it's terrible for Sony. A $399 price point in November means that next November, they'll have to offer it at $300, the following November, $200-250, etc. etc...

This ensures Sony will lose money for the entire generation. There's no way they can cut $100 in manufacturing out the PS3 with a smaller HDD (probably $5 or less), card slot removal (another $5-10), and the PS2 GPU (maybe $15). So that means Sony is willing to take an even LARGER hit on the PS3 than they already are taking on the 60GB/80GB models.

With the deep pockets in Redmond and the 360 nearing profitability on hardware (if it's not there already), Sony is playing a very dangerous game if they attempt to squeeze Microsoft's price structure like this.

rocket, while Sony may lose money they are at a point now where they need to make a decision. They will either drop to a $350-399 sku this fall or simply not sell enough units to make any sort of profit anyway. $500-600 consoles don't sell well, no matter what games you have.

So Sony either take the plunge and lose some money to gain their market share or forget about the PS3 entirely and start planning the PS4 for 5 yrs time and forget this gen.

As much as people don't want to believe it (xbox fans, that is), the cell may turn out to be an amazingly capable chip combined with the RSX. It may take a couple more years before we really see if there is that much horsepower yet to be tapped. If there is, then Sony is fine as they don't need to rush the price down immediately. If it isn't, however, Sony is in a tough spot right now...

There is another possibility. It would depend on what sort of a problem a video game is. Depending on how a particular problem, in this case game, interacts between various components you may get very different results even when fully optimized between the PS3 and the 360. If that does turn out to be the case terms like horsepower may not even make sense in comparing the two as architectural difference may dominate in some cases.

I can say though that the PS3 looks to be an excellent platform for geophysical work. The types of problems that we tend to tackle break apart wonderfully for it and I just got back from a conference where there were several poster presentations on how well it works as a low cost seismic workstation, if you can deal with the limited memory.

Regardless of gaming potential I may see about getting one for messing with at home, make justifying it a lot easier when it helps with school work not just distracting one from school. Any PS3 owner know if you can hook it up to a monitor or is it TV only?

I think it's coming, but not until the 60GB models are sold out.

Anyone who doesn't think this will greatly help sales is foolish...should boost sales by another 35-50%/month...add the fact that the holdiay season and good games are finally starting to come out--and sales should EASILY double or more permanently.

I think the PS3 was always intended to last 10 years, but like the PS2, its sucessor will arrive in the market within five years. By then the PS2 will be discontinued, the PS3 will be relegated to PS2 status, and it's a fresh start with the PS4. 

If they drop the price $100 dollars they will seem desperate as they already had a 'price drop' this year. Everyone informed knows the first price drop was a bit of a sham (They dropped the 60GB down to the 20GB price, it was more of a feature increase than a price drop as such.) but everyone who isnt informed will think that Sony has desperately dropped $200 dollars off their console. That isnt good for consumer confidence.

Meh, I think it would be better for Sony to wait until early next year to drop the price, by then everybody will have forgotten about the last 'price drop' anyway.

@Sorrow, you are right it will greatly increase sales for a period of time. Each segment of the market has a certain saturation with the release of a $400 console Sony will be accesing a market segment that the havent currently targeted, but eventually that market will become saturated. What I'm trying to say is I dont think that overall their console sales will increase by much if they drop the price now as compared to next year as the same market segment of people willing to pay $400 for a PS3 will still, mostly (some will have bought a X360 instead), be there. 

The increase in sales as such wont be permanent as they will have to drop the price again once that market is saturated. The Wii currently seems to be running in to saturation problems in Japan. 

I don't think Sony wants to start a price war. Nintendo can drop the Wii to $199 and still make a profit. MS can drop the price because they have lots of money and will be switching to the cheaper Falcon soon.