Sources tell us that Sony is apparently developing an even smaller and slimmer PlayStation 3, or so we are led to believe. Of course, with Gamescom around the corner and the upcoming holiday season, a smaller unit with a number of cost reductions could equal a significant price cut that could help Sony capture new customers or maybe attract those who want to add it a second console.

While Sony has publically said that they have not announced anything yet, they go on to state that they would never say never about another reduction in cost and size that might be right around the corner. We suspect this could be an indication that the company is at least thinking about it, if it isn’t in development already.

How and what Sony might revise to make the PlayStation 3 cost less is a matter of much discussion. A hardware expert we spoke with suggests that a company’s engineers will seek savings in all of the standard places; and given the configuration makeup of parts used in the unit it could be difficult, but not impossible. Of course, the question is really whether the development costs yield enough of a return on its investment for Sony to move in this direction.