I want backward compatibility. I'm not planning to buy another PS2 as well, since mine is dead. Plus the games look horrible without any upscale upgrades on a LCD TV.

Makes you wonder with all these various SKUs, how does Sony want to achieve a streamlined production process. Dont all these SKUs make the production much more complex and hence more costly? Furthermore, introducing allways new top end models will make the systems stay costly for longer. How does Sony want to reduce cost quickly with such a strategy?

i Cbf reading the Link.. but its coming to Aus to :) too bad i alrdy got ps3 but mehhh

Don't worry abot Sony for that regard.  Sony launches so many SKUs for their multiple product lines (TV, Camera, Computer, MP3 player....) around the world.  In comparison, I think maybe PS3 is the simplest one for Sony to manage.

Good,this will increase the PS3 sales in japan too.

Well, depends on whats coming. The 80 gig for the US was most likely to get rid of the motherboards of the 60 gig Europe laying around. I think they planned the new SKU's a long time, and needed to get rid of overproduced chips/motherboards etc. that where already purchased or laying around. The 40 gig will have a new motherboard (it seems) and maybe the 65nm. Overall the 40 gig should be reduced in manufacturing cost big time. Maybe they about to brake even at the 399$ if you only calculate hardware costs. So introducing a new "high price" model and fade the old ones down makes sense, if they can produce those new units cheaper. Remember the PS3 was rushed out, really really rushed. And because of that, they had much space left to reduce the manufacturing costs and do so in the near future. And if you need to do a new motherboard for that, it means a new SKU all along. Thats why Sony is pushing so many PS3, they are forced to do so, if they want to get the price down, because the first one was not effective (in matter of production costs).

Sony's biggest problem was the price of the PS3, everyone agreed to that. Now it is the library of games. Sony can't do anything on that end and the problem should be solved in march. But they did what they could on the price problem. Ok 399 is still a high price for a gaming console, but I think thats the price where they wanted to be all along and the market can accept it (for know). I would call this price "fair".