Looks like Sony will not be reducing the price after all...shame

Amid rumors that Sony is planning on dropping the 80GB model of the PlayStation 3, instead allegedly focusing solely on its backwards compatibility-free 40GB model, comes speculation from industry analyst Mike Hickey of Janco Partners as to why. He tells GameDaily " A recessionary environment will likely punctuate the 80GB version' s relative and absolute retail sales disappointment" pointing to the lower-priced 40GB model as having better " traction" with consumers.

Not necessarily, says the NPD Group, who later told GameDaily that the $100 more expensive 80GB model outsold its lower-end sibling last quarter. The more pricey package may have been more attractive to buyers because of its pack-in software, but still shoots a sizable hole in the theory that the more feature rich PS3 is languishing.

Could help reduce PS3 production costs

Sony and Nichia have jointly developed a smaller, less costly Blu-ray reader/writer module.

The company expects the new laser unit, which is just 3mm thick, to appear in the company' s 9.5mm laptop drives sometime this year.

According to a Tech.co.uk report, the new unit is able to handle disks with organic dye in the recording layers which can be churned out from existing DVD production lines.

A smaller, less costly Blu-ray laser unit could undoubtedly reduce production costs for the PlayStation 3, allowing Sony to drop the price even further should it choose to do so.

Although the company has denied an impending price cut, rumours have surfaced from US retailers suggesting that Sony will be phasing out the 80GB PS3 model. An internal Best Buy document surfaced allegedly indicating that the retailer would no longer carry the 80GB SKU after January 28.

Whether that means the company plans to introduce a new SKU or keep the 40GB as the only SKU - at the same price or at a lower price - remains to be seen.

When contacted by GamesIndustry.biz, a Best Buy spokesperson refused to comment.