This seems to be what some industry insiders are indicating, but this is not an official announcement by Sony.

http://www.theregister.co.uk/content/50/18719.html

With the Xbox and Game Cube coming out later this year, it would probably be a smart move for Sony. Hopefully it will put pressure on MS and Nintendo to lower their new console prices as well.

That is good news. I've been holding off getting one because of the price.

Well systems usually don't make the bucks off there system alone. they depend on the video games of the system to bring in the real profit. so this is the motive here. Dream cast had the same thing. they lost money in the production of making the system itself, but gain it back with the video games they sell. thus a big libery makes a better system.

One reason DC went down under was te easy burning that the system allowed.

My only suggestion is that PS2 better start pumping out the games fast as all hell! if they want to compete against the next generation of systems, they better hope they can pump those games out FAST!

Actually, I think the PSX launched before the holiday season for $299, then dropped to $199 the next summer.

So, Sony could follow the same schedule.

Making back money on software will be helped shortly, when they start shipping the big 1st party games. Sony will get more revenue from GT3 / Dark Cloud / etc. than they get from 3rd party games. If the major 1st party titles are on shelves for Q3, it'd be easier to do a price drop on the hardware.