Why would someone be upseet?

Well unless they stop manufacturing 80 gigs and offer only the 40 gig afterwords. Most likely that's just fear based marketing SCEE is doing though.

Awesome, hope it moves units :)

I'm still not convinced Sony has the games to back up the price drop. R&C and Drake look nice and all, but they're no Halo 3. I don't even like Halo that much, I'm just arguing that finally getting the PS3 in similar price territory to 360 isn't that big of a threat unless there's a huge demand for Blu-ray. So far, there isn't. Not to mention Sony isn't going to close the 6 million gap in one holiday season.

I imagine Microsoft will slash the price early next year to counterbalance Sony's impressive game lineup.

Yeah, I'm wondering if Sony will revise their estimates on Oct 25. I just don't see how they can maintain the financials with constant price cutting. We'll find out in a week if they are going to be honest or try to hide the truth again. 

Ah, so that's when their Q2 report comes out FishyJoe? I don't think they'll change their forecasts, I mean, "come on, NOW that the holiday, with its massive sales, has almost arrived?". I am more interested in looking at what kind of financial impact their pricing changes have had.

PS: Congrats on getting an avatar ;)

Thanks, I couldn't take the heat anymore about the avatar

Anyways, last year sony went from $700 million loss estimate in Q1, to $1.2 billion Q2, to 1.5 billion Q3 to finally nearly $2 billion for the fiscal year. So it's not like Sony has a great track record in being honest or at least accurate. Then they went and changed the accounting method for tracking cosoles this year to further cloud the issue.

BTW, Microsoft, Nintendo and Sony all report on Oct 25 so it should be a fun day/night. 

I wouldn't count on anything in that 25th report. That is obviously a previous quarter report and the damage is going to be done this quarter.

There are a number of things at play THIS quarter that are interesting.... They had to spend the money on a 40 gig redesign. I know it might not seem like much, but the expense was there. They cut the price and are moving more consoles. More sold consoles at a loss means bigger financial losses.... How big?

Sony sold off an insurance business and more or less said they were going to pump that money into the playstation brand.

I also think it is interesting that Sony got out of the RSX and Cell business and "recouped" some cash in the process. That money could technically be put right to the bottom line of the entertainment biz since technically this is all PS3-related. That would help offset losses rather significantly.

Lastly, the lack of BC in the 40 gig surprised me greatly. The cost saving there isn't huge and for Sony to do that means they are pinching every penny with a pair of vice grips.... To me that indicates that Sony is burning cash like Michael Jackson and is working every angle to mitigate losses...

They could say, 'we have nothing to announce at this time' rather than lying outright. *we* knew there was a price drop coming anyway -- they were just trying to convince others that there wouldn't be. How do you think those customers will feel when Sony said there would be no price drop and then there was one? It's a very short-term strategy to lie like that.

The bolded part of the quote suggests that Sony wanted people buying PS3 games, not PS2 games. Tretton himself said it. He conceded that the cost wasn't reduced significantly -- estimates are about $6 -- less than half the amount of money Sony makes per full price PS3 game sold. They said they're doing it encourage a higher PS3 attach ratio.

 The PS3 has alot more tech (like Blu-ray) that starts at a very high price, but declines very quickly after its introduction.  Similar to what happened to LCD displays a couple years back - went to half price in one year.

It would be a $150 drop for PS3 (if my predictions are true), if you consider the 20 gig started at $500 and 60 gig started at $600.