The internet is awash with rumours of a revised PS3 to be announced at E3, so it must be true. Nicknamed PS3 slim, Sony's (NYSE:SNE) new unit is said to be considerably smaller than the original. This makes eminent sense. Firstly, the insides of a console constantly evolve during its life to use less and more modern components, so why not shrink the outsides to reflect that and save money? It is something Sony have done before. Secondly, a significant percentage of the cost of a console is shipping, warehousing and other inventory costs. Halve the size of the boxed machine and you nearly halve these costs.
What is for sure is that Sony are coming third and last in this generation of home consoles, a long way down from having won the two previous generations. PS3 has cost them many billions in losses and the only way to recover the situation is to get more machines out there. The most effective mechanism they have to do that is price. So the PS3 slim could be the start of the Sony fightback.
Disclosure: No position