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120GB PlayStation 3 to replace 80GB?

Last week we heard rumors that Sony would be permanently discontinuing the 80GB model of its PlayStation 3 console, leaving a single 40GB model in stores. But according to Ars Technica’s unnamed but fairly reliable inside sources, Sony is sticking to a two-model approach at retail with a new console bundle.

The rumored bundle will be packed with either a 120GB or a 160GB hard drive and a Dual Shock 3 controller, while keeping the same $499 price point as the 80GB model - No word on backwards compatibility, though. If the rumors turn out to be true, the 80GB console will be the third SKU axed in just over a year since the console’s release.