My understanding of it is that they cut the price to be more competitive with the Xbox 360 – a battle that they are currently losing, as you may know. Also, I read here that the price cut is accompanied by a slimer PS3 model. Some of the changes include: “Koller said the PS3 was made smaller by using a new cooling mechanism, a new power supply and shifting to 45 nanometer chips from the previous 65. The size of the external power block is also reduced, and the system uses a third less power, Koller said. Sony also did away with the power switch on the back, moving its function to the pause/resume button on the front. I’m just glad they added real buttons for pause and eject; on the previous model you just press lit but undefined spots on the case.”