So will you be bringing out an add-on to put back all the other functionality that's been ripped out of it since launch too, Kaz?

No, but I daresay some misanthropic, washed up ex journo could just host it illegally on their website and charge people to download it.

*yawns*

all this 40gb bashing is kinda old, since it was the 40gb that essentially gave Sony some footing in the market.

I have a launch ps3 and it now has 320 gig harddrive I got it for 100 bucks to think that the 120gig 360 hdd cost 189 I have to say I am more than happy.

Where's the problem? 40gb / 80 gb you still put in a way larger hdd on your own. So I wouldn't care.
Where I feel worse is, that these models lack the backwards compatibility

yeah, tasunki is right without backward capatibility why buy a ps3?? innovation means to move "forward" not stale on promises. sony you owe your consumers that privilege
being able to play ps1,ps2,ps3 games dont hop skip and jump us.

The fact that you can change the harddrive out anytime is awesome so I don't care about the size. I just wish I could play my God Of War 2 on the 40G PS3 that I just bought.

I WANT BC JUST PUT A EMULATION CODE ON IT AND I'LL BE HAPPY

I am so glad that I ended up getting the 60GB model when it was out. It had the B/C & Memory Card Readers and 4 USB ports. I don't think that chip costs too much to add. I bet they could have the original 60GB with all the bells and whistles for the same $399.99 price.

The Obvious reason that they have completely taken it out is so they can depend & know that for every PS3 that is now bought only software for the PS3 will be purchased for it. It really sucks but is obviously being done for pure business reasons.

@9: I think the real reason they took it out is now plainly obvious... a new version of the PS2 plus120 titles for the PS2 in development! Who would buy a new PS2 if the PS3 could play those games?

Once again, Sony says "bend" and the public ask "how far?"... and then charges them for the privilige.

And what are we on now, the 6th SKU from a company that mocked the opposition for releasing 2 SKU's? Hypocrisy at it's absolute finest.

1. 20GB
2. 60GB with BC
3. 60GB without BC
4. 40GB with BC (as seen in the MGS4 bundle)
5. 40GB without BC
6. 80GB

Seventh by my count:

20GB NTSC w/hardware BC (Japan only)
60GB NTSC w/hardware BC
60GB PAL w/software BC
40GB PAL no BC
80GB NTSC w/software BC
80GB NTSC no BC
80GB PAL no BC?

Are you sure about the 40GB model with BC? If that's right then it's 8.

Yes, you still have a powerful console, but will only be able to install 10 games, judging by current installs !

Still, Sony are to be applauded for making it easier for people to swap out their hard drive (despite the cheap screws used on the caddy - mine crossed very easily, but Sony Europe kindly replaced it free of charge, even though I had an import PS3).

Much better than the Microsoft expensive solution (and less complex to copy stuff back to)

oh dear me, do you buy a p3 for the primary use of playing ps2 games, this is a next gen console not last gen, backwards compatibility was just an added extra is 60 gig units, do you buy a 360 to play original xbox games, come on, just keep ya ps2 !

In my opinion backwards compatibility is a none issue now. Why are people still asking why it was removed? See below:
PS3 60GB fully loaded incl BC - £425
PS3 40GB cut down no BC - £300
There is the reason right there, to get the price down to a level that many more people will buy into. I myself just purchased a PS3 40GB including BF:BC for £300! And so I am personally thankful they removed it otherwise I would be paying more. The truth is staying at £425 would have hurt Sony alot more than removing PS2 compatibility altogether and selling at a much lower price.

Was about to add my comments regarding BC but as I scrolled down I see the last couple of posts beat me to it!

I have a 60GB with BC and I used it for the first month I had the console (last June) to play and complete Tomb Raider Anniversary and not since.

I would rather have saved £100 to be honest as I still have my PS2 sitting in the cupboard. This is the PS3 and it's primarily for playing PS3 games. This is why you can still pick up PS2s for next to nothing in the shops.

Anyway, clearly a few boo boys on websites like this are just a minority (who probably don't have a PS3 and have no intention of getting one even it cost £100 with a 1TB HD and BC...) because since the release of the cheaper machine, people have been buying in bigger numbers and clearly not too bothered that they can't play their last gen games.

Anyone who thinks BC costs Sony £125, or even a small fraction of it, is a fantasist.

If it's just a case of software then it wouldnt really cost Sony anything to add BC onto the PS3's.
I think it's more of a case that they want to be able to kill off the successful PS2 as whilst that was successful it would hamper the PS3's ongoing development if people keep buying old gen games and not the next gen games.
It's only recently that PS2 Sales have started slowing and this will only decline further over the next year or 2 leaving the way for the PS3.
The Problem really was sonys own previous success.

I don't subscribe to the theory that Sony removed PS2 BC to promote PS3 software sales - how many people are likely to fork out £300-£400 for a machine to play games that would run on a £100 PS2?

It's funny how at launch people slammed Sony for the PS3s high price. Now that they're offering it at a much lower price, which was only possible through stripping out features from the launch SKU, people are now complaining over the dropped functionality. For Sony's sake you complaining consumers need to make up your minds. You can't have both, that would be unrealistic and greedy. Are you so spoiled that you can't comprehend it's impossible for Sony to offer the launch high-end SKU PS3 for the current low-end SKU PS3 price? They would be selling it for 50% cost, completely unrealistic. Sony has simply given you guys exactly what you asked for. Stop being so heavy, be happy.

Thew only reason i am cheesed off with the removal of BC is because im lazy LOL. I really cant be bothered to unplug then plug in another console lol. Wont stop me buying PS3 later this year. Not gonna re-invest in another 360, out of principal more than anything else.

well I see the point they throw in a bigger hdd for a couple more quid and make more profit simple.

but I think they would of made more money over all with software sales if they had left the 40GB in and then just did a price drop by say £20-£30.

but i suppose Sony need some money in the bank and they'll probably do a price drop with the release of HOME anyway

"Now that they're offering it at a much lower price, which was only possible through stripping out features from the launch SKU"

Are you really that stupid, or just a fanboy?

You do realize a 40gb SATA 2.5inch hard drive only goes for a shelf price of 25 American dollars these days and an 80gb only goes for $35. And the cost difference for Sony is likely much much less. So your proposal for a reduced price 40gb PS3 would only trim a few dollars off the price tag ... in other words not worth dropping the price ... in other words it would be better off to offer a larger hard drive instead.

@ RevStu on Jul 22, 9:40am
"20GB NTSC w/hardware BC (Japan only)"

This was a launch SKU in North America too, not just Japan.

Even though they are staying tight lipped, Sony has always maintained a 2 sku approach. By getting rid of the 40gig and converting it as a base 80gig sku they are indeed making way for a new sku which should be hitting the shelves this holiday season. People at ArsTechnica clearly reported a few months ago that a new sku with a bigger hard drive was in the works, possibly a 120/160 gig. Sony's strategy in keeping quiet is to gain market share in their lower end sku.

This holiday season will truly measure the hardware sales performance for Sony, Nintendo and MS. If Sony drops the ball by keeping a one sku approach with their lower end model they are heading for trouble. Doesn't matter if it has a Blu Ray drive. Majority of Playstation fans who have shown loyalty by sticking with Sony expect a continued return on investment on their previously bought PS2 games.

Backward compatibility is not a necessity as mentioned by Sony's exec's, as they are planning to move on but it is a must if you were to look from the consumer's point of view. True that most gamers now do not care of playing PS2 games on PS3 as they have agreed to move ahead by accepting Sony's approach. But what about those customers who own more than a 100 PS2 games. When PS2 phases out so will it's tech support. If Sony is expecting these loyal customers to throw money down the drain on their currently owned PS2 games, they are sadly mistaken. It took years for them to build consumer loyalty, it won't take that long to lose it. Sony knows that and bringing "Rumble" back to it's controllers is a prime example of Sony's sound business strategy. They didn't have to after facing a major lawsuit but they did. Why? They listened to their customers. A heavy price they paid, but it it all paid back with higher PS3 sales. The same will apply to backwards compatibilty.

If Sony wishes to gain a higher market share in PS3 hardware sales during this holiday season they will have no choice but to bring it back. So far Ars Technica has maintained a good track record with their predictions. A 120/160 gig backwards compatible sku is on track for this holiday season.

Your idea sounds as though it could be true for North America, where they have always had 2 sku's on sale. However that is not true for Europe where we have only ever had 1 sku available at a time. I do not see backwards compatibility returning to these shores.

You ask the question what do people do with all there ps2 games when they want to buy a PS3? As other posters have said they keep there PS2! And when they want to play a Playstation 2 game they unplug there PS3 and plug in the PS2. Problem solved! Ok so it's not as nice as having just one box that plays everything but PS2's are so cheap and small that it's really not that bad. I am betting as there PS3 games collection grow's there PS2 will quickly be consigned to the loft or perhaps passed down to a younger generation.

I have been put of buying the PS3 due to my daughter having lots of PS2 games and peripherals such as buzzers, microphones etc. The thought of buying them all again to work with a PS3 is scary. I have the tv set up in the lounge with 3 console's, sky, dvd player etc and to start pulling wires out every time we would need the PS2 would
A wind the other half up and
B possibly start to damage the tv connections at the rear.

@Deleth
Microphones are usually USB so you can use them on the PS3 without buying anything new. And they make fairly cheap PS2 controller-to-USB adapters for everything else. The only peripheral gamers need to rebuy are Guitar Hero guitars. Which is mostly Activision's fault.