Sony to release cut-price $399 40GB PS3

Microsoft’s director of technical strategies Andre Vrignaud has predicted that Sony will launch a cut-price 40GB PS3 this Q4 in an effort to maintain competitiveness in the next-gen console war.

Speaking to N’Gai Croal at Level Up, Vrignaud stated: “A single, $599 SKU would be untenable – if they don't move significant hardware this holiday they'll basically be dead for this generation.

“My prediction is that you're going to see the creation of a new, low-end SKU this holiday. It'll likely remove integrated wi-fi, memory card reader, and most controversially, all backward compatibility.

“You'll see a new wi-fi dongle made available. And finally, this low-end SKU will likely come with a smaller 40 GB hard drive. The low-end price will be set at $399, with the higher-end 80 GB SKU dropping to $499.”

He concluded by predicting an October launch. We shall see.