PC Magazine reports: "Sony Corp will launch a cheaper model of its PlayStation 3 in the United States, hoping to attract more buyers as it goes up against rival game consoles from Microsoft and Nintendo this holiday. The company also cut the price of its highest-capacity model by about 17 percent."
It seems like the game console business is a cut-throat business. Sony was already losing money on the console, now they're going to be losing more. They're hoping to makeup the lost from the console through the licensing of the games.