According to the BBC, the big upcoming announcement for Sony will be a new 40GB SKU for the PS3. I'm guessing it will debut at the $450 price point - while the article gives only prices in pounds, it does say "The entry-level PS3 is now the same price as an Xbox 360 Elite." We knew that already. What's more interesting, however, is that they say this new SKU will have no backwards compatibility, as well as only two USB ports (the regular PS3 has four) and no memory card reader. It still retains the wireless connectivity as well as the Blu-Ray player, of course.

Frankly, this may be what gets me to stop playing Disgaea 2 on my PS2 and upgrade to the next generation. The lack of USB ports certainly isn't a problem for me. I never used the USB ports on the PS2, and I don't plan on using the mouse/keyboard combination if I get a PS3. Also, USB hubs are really cheap, but I don't know if one can use them with a PS3, as most claim to Windows-only compatibility. As for the backwards compatibility, although I don't know how axing a software feature saves money, the other SKUs had been struggling in that area anyway, and I had been planning on hanging on to my PS2 in case I ever wanted to play some of the really great games I own for that system as well as the PS1.