as will i, will almost seem like a move of desperation

they have two choices,
1. Lower the price to 399, but lose alot of money on ps3 sold, unless they strip it.
2. Keep price way it is, but have a chance of not selling well this holiday

One thing to keep in mind people...

When a company makes a profit on the sale of one unit of a product (aka it costs them 90$ to produce and ship it and they get 100$ for that unit), it does not mean the company has many ANY profit on said product. It just means they've stopped bleeding money.

Do you seriously think that either Sony or MS has made a dime off the 360 or ps3? They're both still trying to dig themselves out of the hole they dug by selling below production cost (or potentially digging a bigger hole). Not to mention development costs on top of that before they sold the first console.

I can't believe that Sony would be willing to sell another SKU at 400$ if they are still selling at a loss. A 40GB HDD is liable to be more expensive than an 80GB HDD, not cheaper. These things aren't priced by the gigabyte. And how much do you really think a couple of USB ports cost? What exactly do they have left to cut (from the hardware) and why didn't they cut all of it already and sell that one instead of the 80GB version?

If you are a company that has already spent billions on a product, how can you justify cutting the price again and again, while bleeding even more money? They do have stock holders they need to pacify. It doesn't matter one wit if they sell 10 billion PS3's if they've lost even 1$ per console, it just means they've screwed themselves to "win".

It would be an amazing move if Sony managed to get the Units produced in time for a late October launch.

I think its just as likely that Sony's main holiday offering is a 80Gb PS3/Motorstorm bundle at $499.

They take they're lumps, launch the 40 Gig in the springtime, and try to dominate 2008.

Sony wants to make money. Even after the holidays there will be less then 40 Million Consoles sold worldwide from this "next gen". More then enough room for Sony to come out of the gates strong if they want.

I mostly agree with Shams; I handpick the Wii though, because of the freshness of titles coming. See Zack & Wiki, Mario Galaxy, RE:UC, Nights, etc.

http://arstechnica.com/news.ars/post/20070930-playstation-3-getting-holiday-makeover-399-ps3-rumor-has-legs.html

And:

http://arstechnica.com/journals/thumbs.ars/2007/09/09/500-80gb-ps3-with-a-spiderman-3-blu-ray-pack-in-our-mole-lets-us-in-on-sonys-future-plans

This goes well with the announced PS3+Spiderman 3 Italian bundle whose price will be announced on the 12th of October, and the announcement that Sony France has scheduled for the same day.

A $/€399 PS3 for the holiday period. Amazing, no one was expecting this! I still don't believe it 100%, but it's looking more and more likely...

What im interested in seeing is the Microsoft response to this. If Sony do make an announcement in two weeks, Halo 3 hype will have died down, and Microsoft will have to do something BEYOND simply presenting their current gaming lineup in order to counter their competition. A month from now you would expect Falcon's to fairly effectively be rolled out, another price drop perhaps?

I don't think MS has to respond to SONY. As they mentioned before they have their own internal plans as to when to do a price drop etc. With the amount of games coming out this holiday along with the 360 bundles should be more than enough to respond to SONY. Remember they may finally make money and it would be kind of dumb to drop the price to go back into the red. Of course I am baised as I believe games lead to sales so since the games will be there MS has nothing to worry about from SONY in the next couple of months.

Thank you. Just like the last price cut by Sony, M$ just sat tight. Yeah, the PS3 surged, but was it sustained? Then ... with the Sony slide in full effect, M$ went for the juglar - did the price cut AND released Halo 3 shortly thereafter. I think M$ will do the same thing - let Sony show its hand - and do a price cut very close to the Mass Effect launch date. And really, they don't need a price cut ...

Billy Gate$ is in it FTW ... Sony has went through how many SKUs in less than a year? There's blood in the water ... and something tells me that the PS3's holiday season will be one of the worst in gaming history ... mark my words ...

 the more moeny they lose on this price war the less money they have to develop their next console...

 IF sony come out with a 399 price really,that means only 2 things:

1)

they are dying and try the ultimate with lowering the price...aka lose more money...

in the hope that all people go buy ps3...

and in the hope to reach 30% of market share 

2)

the ps3 real value is not 600 but 300...

happy for all those who buy it in these months with no good gameto play...

which of two???