We all know that the $199 base price of the Arcade makes it very appealing to many consumers and it probably would be hard for the PS3 as it is now to counter that price point.  However, part of the $299 PS3 Slim has to come from the fact that it has a 120gb harddrive.  Is there any way, Sony could simply remove harddrives from the PS3, like Microsoft, does with the Arcade and just have a basic model on the market that would be much closer to the arcade's price and leave the consumer the option to buy a hard drive if they wanted one after the purchase of the console?

    I think a 120gb hard drive has to add more to the cost of your console than a 20, 40, 60, 80, or even no harddrive?  And if Sony could get one model out there at the same price as the current arcade (even though MS would probably cut the Arcade as low as they could to counter that) it would help Sony out even more than the current PS3 Slim will.

No, the 120GB HDD costs nowhere near $100 anyway. I reckon the Elite subsides the Arcade for the Xbox.

So Sony can't really counter the Arcade apart from convincing consumers so that in the long run, they will spend less on the PS3

Having an SKU with no hard drive? You do realize a ton of games require installation, which requires a Hard drive right?

You can get a 120GB for about $50 on amazon, and cheaper in mass as Sony probably do

http://www.amazon.com/Western-Digital-WD1200BEVT-120GB-Drive/dp/B002DHL1J2/ref=sr_1_2?ie=UTF8&s=electronics&qid=1250961051&sr=8-2

Sony would have to release a pretty gimped model of the PS3 in order to compete with the Arcade in pricing! I mean the 360 has the added price flexibility that they only use DVD in the console, which is going to be amazingly cheaper than the Blu-ray drive in each and every PS3, and i'm sure there are other comparisons where the 360 comes out cheaper (to manufacture) so i don't think at the moment that it is possible!

only thing I can think of is wifi.

no. welcome to the site. you should read more before you start making threads again :P

It is well known that a few ps3 games require installations, it is also well known that the difference between HD sizes to giant industries cost only a couple dollars or so. Seriously, they would only save maybe 15 dollars going to a 60GB than a 120.