I wouldn't get too excited. It might happen soon, it might not. The article doesn't say.

I think it's too soon for them to drop it. Despite how desperate it would look, they would have the ignorant fanbase of people who bought it for $600 just 2 months to deal with. I don't have a problem with them dropping it out of desperation (Sony should be use to the near constant stream of bad press by now), but I think there would definitely be some angry early adopters.

Also, I wonder how much money they make off of the software? I mean, if Sony is losing $400 just by selling the PS3, they gotta sell a *lot* of games to one person before they break even on the cost. I'd be interested to know how much any console-maker makes off of retail games--1st or 3rd party.