Remember all those articles about blue laser diode shortages and low Cell processor yields? Well, it looks like there may have been something to them. This morning, Sony posted the staggering announcement that their estimates for PS3 production by year end have been cut in half, from 4 million to 2 million. How is Sony going to deal with this shortage and distribute them amongst the various continents? In short, they can’t. The European PS3 launch has now been pushed back another 4 months, to March 2007. But the bad news isn’t just for our European friends… North America will only see 400,000 PS3’s for launch, and Japan will get a measly 100,000.

It should be interesting to see what this means in the end - if demand for the PS3 remains high, then this could give retailers a chance to reap extra profits by forcing bundles and other cost increases on consumers. It might not be so outlandish to expect the earlier-reported $1000 PS3 bundles here in the states. Then again, if retailers push the price too high, or if supply shortages are severe, then demand could wane drastically and many of those kiddies with dreams of PS3s dancing in their heads could see a Wii60 in their stocking instead on Christmas morning.

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