120GB w/ Dualshock confirmed?

Some may remember hearing rumors of the 80 GB PS3 being discontinued a month or so back. Well, apparently those rumors have been confirmed. Word has leaked out from the Gamestop conference that the rumors of the discontinuation of the 80 gig unit are indeed true, but now there seems to be talk about Sony shipping out yet another sku. Supposedly this new sku will be a 120 gb unit that comes with a DualShock-3 controller (backwards compatibility has not been mentioned).

Logic says that this possible 120 gig sku will replace the 80 gig's position in Sony's current selling strategy. So does this mean that the new sku will sell for $499.99? Maybe. There is no current release date for this new sku, but I wouldn't be surprised if the new unit shipped before the worldwide release of Metal Gear Solid 4.

Still, I can't help but scratch my head over Sony's business strategy should they create this new sku. Wouldn't it make more sense to release an even cheaper version of the system? The sweet spot for the PS3 would be at $299. The high price tag of the Playstation 3 is, at least in my opinion, what is seriously curbing its install base growth in the US market. Even the stripped down version of the 360 (the Arcade) sells for about $279. If Sony wants to get its system into households, they need to lower the price of entry to rival that of Microsoft's box.

A lot of people have attributed the Wii's success to two primary factors: Nintendo's savvy marketing and the price tag. Nintendo has chosen to sell the system to mainstream public by subtly showing the Wii as a toy - especially one that the whole family can get into. Also, $250 is a lot cheaper when you look at the prices of the premium models for the Xbox 360 and PS3.

At this point Sony has two choices for success. They can either lower the price of the system even further, which may draw in more users but will obviously hurt the initial profit margin. Another idea is to put more money into backing the developers to get out their games sooner. Right now the only game that PS3 can really put stock into is MGS4. Yet after the Metal Gear release in June, there are no exclusives out for the PS3 until September. If Sony can put out a well-marketed title for each of the summer months (like 360 did last year), then there is a fair chance they can catch up to the 360 NPD numbers.

Or at least that's what I think.