It is not only VAT. In Europe we do have to observe more strictly environmental requirements for products, user rights, warranty periods, and of course costs for localizing manuals, support, advertisements, distribution channels (which vary in volume country-by-country).

Still this doesn't describe (as fair) this big price difference. Maybe 30-35%, but no more.

The europeans complain about VAT because it is more than the US. the cost of the US console is already cheaper and still IS cheaper even if you buy it in Texas were they add more tax on afterwards. 

17.5% Tax Buddy in UK. Plus we pay more anyway. Do you get why we get annoyed?

It's even worse in Sweden price of PS3's are around £400

I don't understand why Europeans complain so much about Value Added Tax when the USA gets taxed just as much, if not more. Just in different ways.

Sony can commend any price it wants in Europe because we keep buying their articles. Every time I make a price comparison I get the feeling that we're subsidizing the US market for Sony or any big brand name manufacturer, and this has always been the case for decades. Sad, as design, development and production is done in Asia and I can find no meaningful explanation for price elasticity between US and Europe.

Re: Sony announces PS3 price drop
$400 dollars in US

Wow!!!
a $400 price drop in the US!!!

This is not a price drop of the 80 GB model. It is an upgrade of the 40 GB model to 80 GB at no cost. There are a number of features (most importantly, lack of PS2 support) which the $400 model presumably will not have, that are present on the current 80 GB model.

The 40GB is being replaced by the 80GB Core model, same functionality and price as the current 40GB but bigger hard drive. They didn't say anything about dropping the price of the current 80GB SKU.

Sony is ditching the GS chip to lower costs so it can finally have one low(er) price SKU. John Q Public, the guy who buys a couple million sports games, only sees 80GB and doesn't play old games anyway.

But the GS chip is only part of the story. The other part is a 45nm Cell, which has long been expected for Q3/Q4.

We shouldn't expect to see PS3's for £200 because firstly; VAT, so that'd be £235 already. Secondly, Sony loves to screw Europe. They do it as thoroughly and as frequently as possible. That said, the 40GB model of the PS3 is currently £300 over here inc. VAT, so it'd be dropping to that. Oh wait, no it wouldn't, we don't even have the 80 GB model.

Charge the Europeans lots and pass the savings onto the Americans. Not that the rest of Europe laps it up and asks for more or anything. Ugh.

the 80GB model also has 4 USB ports and a media card reader built-in.

"$400 dollars" = "400 dollars dollars"?

SM writes: D'oh. You lot don't miss a thing do ya?

But an upgrade of the 40 GB hard drive to 80 GB for no extra cost.