PS3 price drop and a new PSP?

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Rumors surrounding Sony's video gaming hardware are making the rounds today.

First, Gameindustry.biz stoked the fires of the ongoing Sony PS3 price cut rumors. Gameindustry quotes Janco Partners Research Analyst Mike Hickey as saying that Sony needs to drop the price by $100 US, and that there is "increased speculation for a PS3 price cut announcement from Sony in the next couple of days."

The story got odder, though, when Hickey stated "We are also hearing continued speculation that Sony is working on a non-Blu-ray PS3 console, which could enable them to make the aforementioned hardware price reduction." The PS3 is primarily a gaming console, and the main channel of content delivery is via blu-ray discs. So on the face of it, the idea of a PS3 that couldn't play blu-ray movies or blu-ray games seems rather ridiculous. On the other hand, Sony leads the way in digital delivery of "full-sized" games via its Playstation Network service (Microsoft and Nintendo both limit digital sales to small-footprint games). So in theory a disc-less PS3 with a hefty hard drive could be a viable product, assuming Sony beefs up the library of content it offers digitally.

In addition to the PS3 speculation, an even more speculative Sony rumor popped up today: this one for a "PSP 2." The PSP (Playstation Portable) is Sony's entry into the handheld gaming market, and it has struggled against Nintendo's DS system. Gaming blog Kotaku quote's Acclaim's Chief Creative Officer David Perry as having knowledge of a new, UMD-free version of the PSP (much like blu-ray is used to deliver game software on the PS3, proprietary UMD discs are used in the PSP). Says Perry, "I spoke to a developer who is working on it right now. I know this developer is already working on it, so that means they have a prototype. That would sound like a fall release to me." With no UMD drive, once again Sony would be turning to digital distribution to get software onto the system, though Perry claims games would be sold on memory sticks at retailers.

Neither a PS3 without blu-ray or a PSP without UMD seems likely alone, but combining the two rumors is interesting. Could 100% digital distribution be Sony's new business model for gaming?

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