So, what IS going on with Sony and the PS3? Here's my analysis based on what we know up to this date.

So far, Sony announced the PS3 at E3 2005 in May 2005, listing its basic specs and features: 3.2 GHz Cell CPU with 1 PowerPC-based core and 7 SPE cores, an nVidia RSX GPU, Blu-Ray optical disc drive, WiFi, Bluetooth, and a bunch of USB ports. Playback of HD video discs by Blu-Ray was implied, if not outright claimed, and mention was made of an optional internal hard drive unit. But when they made the announcement at E3 (and still to this date) they showed only mock-up units and mock-up prototype controllers. They also showed only pre-rendered examples of game graphics - no actual running realtime games. And they announced a launch timeframe of "Spring 2006."

By contrast, Microsoft formally anounced the Xbox 360 two weeks prior to E3 2005. At that time Microsoft showed actual working hardware in its final configuration, as well as working controllers and playable games. Basically, at the time of the Xbox 360 unveiling, Microsoft had finalized the hardware design. And Microsoft calimed and (for the most part) delivered on the promise to launch the Xbox 360 by "Holidays 2005."

I don't believe that Sony had a final hardware configuration when they "unveiled" the PS3. In fact, I believe that Sony may not yet have a finalized hardware configuration. Or if they do, they have only arrived at it within the last couple months. We'll get to more on that later.

This is, of course, a classic Sony move. The PS3 announcement at E3 2005 was intended for one purpose and one purpose only. And that purpose is/was to deflect attention away from Microsoft's Xbox 360 and to whatever Sony would provide instead. "Don't get an Xbox 360, wait for our PS3 instead."

Sony did the same thing back in 1999 when the Sega Dreamcast was launched. They announced the PS2 (without firm specs and pricing) to hype the PS2 and its world-beating "Emotion Engine" processor and distract customers from the real and available Dreamcast. The Dreamcast came out in the Spring of 199 in Japan and September 199 in the US. The PS2 came out in March 2000 in Japan (with few games but the bonus of playing DVD movies) and in November 2000 in the US. The idea in 199 (and again in 2005) was to make people think, "Oh, I'll wait for what Sony comes out with in their PS[2 or 3] instead. Sony says it will be more powerful and better."

The PS2 was indeed more powerful than the Dreamcast, but not as much as they first wanted you to believe. "Real-time "Toy Story" quality graphics in games?" Not quite. And the PS3, at least on paper (from what specs we have on the CPU and GPU), would seem to be somewhat more powerful than the Xbox 360, but again not as much (2X) as Sony would like us to believe. Where the PS3 is rated to provide 1080p video out, the 360 is rated only to 1080i. However, reports supposedly coming from PS3 game developers indicate that most PS3 games, at least at first, are really just pumping out 720p and 1080i just like the 360.

One thing Microsoft did with the 360 in its launch that was a bit unusual for a game console was to announce, several months after the initial unveiling, that there would be two versions of the unit available at launch. One with an attached hard drive, and one without. Their reason for this was simple: to provide one unit with the full design hardware configuration (including the hard drive and a wireless controller), but because of the cost of those items, at a higher-than-usual price of $400; and to also provide one version at the industry-accepted standard launch price of $300 (as it had been for the PS2 and the original Xbox), without the hard drive and just a wired controller. The scaled down Xbox 360 Core unit would, of course, be easily upgradable to the full configuration. Microsoft knew, and has publicly admitted, that the "Premium" configuration would the bigger selling option, especially at launch, but wanted to make available a lower cost version that would be more accptable to families just looking for the latest video game for their kids at Christmas.

Why do I mention all of that about the two different versions of the Xbox 360? Well, I think Sony may be about to do thesame thing with the PS3. I come to that conclusion after asking three questions. Why has Sony not announced a more firm timeframe than "Spring 2006" for the PS3 launch (or even where the initial launch will be)? Why have they not announced anything on the pricing of the PS3? And why have they not yet shown, at any public venue, actual hardware and playable games? The answer is simple: they have not had a finalized hardware configuration until recently, if even now.

While the basic components of the PS3 may be fixed to enable developers to work on games, the exact final configuration of the unit may have a few questions unanswered. Specifically, there are two components whose presence and exact features may not have been finalized until recently, if at all. Those are the Blu-Ray optical disc drive and the presence (or lack thereof) of a hard drive. The exact number of USB and HDMI ports may also be undetermined. When they showed the PS3 at E3 in 2005, they showed a mock-up with not one, but two HDMI ports. I have a feeling that the final unit may, in fact, only have one (with, of course, the potential for an upgrade somehow to two in the future). And the 6 USB ports could be paired down to just 4.

A recently leaked analysis from Merrill Lynch (see http://www.engadget.com/2006/02/18/playstation-3-costs-800-sez-merrill-lynch-mob/ ) lists the estimated component costs of everything supposedly going into the PS3. The Blu-Ray drive is the largest share of an estimated $900 total system component cost. This is not surprising given that Blu-Ray is a cutting-edge optical disc technology not yet fully available on the mass market. Additionally, there a number of legal, technical, and business-derived issues still up in the air regarding the Blu-Ray disc format. An interim agreement on licensing of the AACS copy-protection scheme was reached only this week. As such, Sony may be considering releasing a version of the PS3 that does NOT have the built-in ability to playback Blu-Ray movie/video discs, but rather only be able to read PS3 game Blu-Ray discs. A separate version of the PS3 may then also be released that provides the built-in ability to playback Blu-Ray movie/video discs, at a higher price, of course. Simple speculationmight also lead one to believe that Sony could include an internal (or add-on) hard disc drive to this "premium" versoin of the PS3, as Microsoft does with the Xbox 360. Recent rumors about a hard drive being built into the PS3 might in fact be references to this "premium" version of the PS3. Since Microsoft opened the door to multiple versions of a console, and did so somewhat successfully, Sony may be emboldened to try something similar with the PS3.

By offering one version of the PS3 without a hard drive and without the ability (AACS and HDCP) to play Blu-Ray movie/video discs, Sony could come closer to meeting a price point that would be more acceptable to the bulk of their target game-playing consumers - something like $400 to $500. A higher-priced ($600-700) version with Blu-Ray movie/video capability and/or with a built-in hard drive would satisfy the "hardcore gamer," early-adopters, and multimedia junkies willing to pay for those added features. This same high-end unit would also fit Sony's assumed goal of using the PS3 to promote Blu-Ray as THE next-generation disc format, and to ensure SOny's place at the hub of home multimedia entertainment.

I believe that Sony may have, in fact, been waiting to see how Microsoft's launch of the two versions of the 360 worked out in order to determine if a two-SKU offering would be accepted and supported by the market prior to deciding what would go in the final versions of the PS3.

With that in mind, I would not be at all surprised to see Sony finally show off these final TWO versions of the PS3 at E3 2006 in May as actual hardware (at say $500 and $700 price points) with actual games, and announce launches in Japan before the end of the "Summer" and in North America before "the Holidays."

Of course, this is all speculation. But then why else has Sony been so tight-lipped about the PS3, its launch date, and its price? And why haven't they shown anything more than they did at E3 2005? Answer: they are satisfied to keep us all guessing, and they hope we will wait with baited breath (and closed wallets) for whatever they will release. If Sony waits too long though, they could be giving Microsoft just the opening the Xbox 360 needs to build a big lead, no matter what troubles Microsoft may have had with the 360's launch.