Sony has taken a bold stance to date, by refusing to drop the price of the PS3 so early in the console's life cycle, despite the slow sales across the Globe. However, there was recently a rumour that the company were looking at producing a 40GB PS3 at a much lower cost, which they could sell to the public at a much cheaper price.

Sky News are now claiming that the rumour is a reality and Sony has indeed spoken to Taiwanese manufacturer FoxConn and asked them to begin the manufacture of the lower spec console. In order to reduce costs further, it has also been suggested that the new model may have less functionality, such as no backwards compatability or a lack of USB ports.

It's believed that the cost of the PS3 to the consumer may well be in line with that of Microsoft's recently launched Xbox 360 Elite, which currently retails at approximately £299.99. Insiders claim that the 40GB PS3 model will be released in time for Christmas.

Source :: Sky News