Sony is following Toshiba in the price cutting game.

In a story from Home Media Magazine, it seems that "Sony Computer Entertainment America will bring its 40GB PlayStation 3, which just shipped in Europe, to the United States on Nov. 2."

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Though this isn't official it looks like this new "40GB PS3 will retail for $400, which is $200 less than the new 80GB PS3, which retails for $600 and comes bundled with the MotorStorm game. Some retailers are still carrying the discontinued 60GB PS3, which sells for $500."

The new "PS3 will not offer backwards compatibility with PlayStation and PlayStation 2 games. Other differences in the new hardware include just two USB ports (instead of four), and no multi memory card port. One addition to the new hardware may be the Blu-ray Disc version of Spider-Man 3, which streets October 30, according to online reports."

"I think you could see a hardware spike if Sony really does bundle Blu-ray movies inside the box," states Michael Pachter, videogame analyst for Wedbush Morgan Securities.

"That 40 GB PS3 is likely to help Sony achieve estimates that are out there (unit potential in the range of 3 to 3.5 million for calendar year 2007 in the United States)," offered John Taylor, videogame analyst with Arcadia Research, "but I don't think it will bring upside.

He also went on to say that, "Moreover, there is concern at retail that split release dates between Xbox 360 and PS3 will give Xbox 360 more marketing money, and a de facto exclusivity window, because PS3 titles are getting completed and certified later."

Despite all this conjecture, "the question still remains whether Sony will drop the $600 price tag of the 80GB PS3 down to $500, and cut the game bundle. Although Microsoft has had success with three versions of Xbox 360 for sale, including the $450 Xbox 360 Elite with 120GB hard drive, the $350 Xbox 360 Premium with 20GB hard drive and the Core System for $280; Sony is expected to stick with just two versions. Historically, Sony has only offered one version of its hardware with PS2 and the original PlayStation, as subsequent, cheaper hardware replaced the older hardware at retail."

So basically, it looks like this is another example of the format war being good for consumers. As Blu-ray and HD-DVD battle it out, prices on from both camps continue to decline.