Well that would be the $199 PS3 David Jaffe was allegedly Twittering about. With about the same degree of plausibility. What you're talking about is virtually a PS2 with forward compatibility...hmmm not a bad idea since PS2 is selling so well.

Oh well, Sony is obligated to produce a PS3 with all the trappings for the various reasons given above. And there is little doubt that the cost of doing this is continuing to fall, as is the case with all technology. So there will be a full function PS3 at a cheaper price than currently, and for Sony to reach (or even come close to) their FY 09 sales projections this needs to be before the Chirstmas buying period. After all having only a PS3 Arcade as the new/cheaper offering isn't going to get all those folks who went and got themselves a cheap 360 Arcade to tide themselves over until the PS3 came down in price to go out and get their PS3 is it?

Not a chance IMO. Sony are moving towards online media, HOME, etc - they will need a LOT of storage to handle this. Hard disks are cheaper than internal flash memory, and have 10x the storage. The size issues don't matter for the PS3 (but they do for something like the iPhone).

There is no real reason for them to remove the hard disk IMO.

the loss of wifi sounds plausible as does most of it but i highly doubt they will remove the USB ports. Also HDDs arnt very expensive i doubt sony would remove it.

What's your problem dude?

lool,,,,if they remove the HDD , movie store will become useless.

this is just plain wrong.

Ok, so either, Sony is able to reduce the size of the PS3 through die shrinks, and tech innovations and combining things, or just from cutting out some fat and a bit of muscle or possibly even a little of borth options.

Even if it is from trimming fat/muscle, this will still be a positive move for Sony....

yeah I agree with most of the guys here. there's just too much stuff in there that doesn't make sense. They will never release a PS3 that cannot play some games, they will never take out the hard drive with the push for all these online feratures, and Wifi is just too damn cheap to save any real money on the system (I think even the Wii has one and look at his price.) MS probably left it out more for nickel & dime purposes rather than trying to keep the cos of the system down.

Not a chance....this rumor is just that,  all rumor and a poor one at that.  IF these changes were to be implemented it would gimp the PS3 to the point where it wouldn't be a viable competitor any longer.   This smells more of an opposing fanboy's wet dream than anything real that would be under consideration by Sony.