In an interview the CEO of Sony Computer Entertainment Europe, David Reeves,
stated that he felt that for the European PAL market it made more sense to do a more significant upgrade in hard-drive capacity than a mere 20 gigabyte increase(such as from 60GB to 80Gb). He stated that he felt that a doubling of the capacity would be more appropriate for the market. This is interesting because in light of recent price reductions for the 60GB PS3 it seemed as if Sony had taken to the idea that making the PS3 as inexpensive as possible was the best way to get it into the hands of the consumer. Also if the 120GB version is produced it will most likely make its way to the US in one form or another. More info on this possible 120GB PS3 as it comes in.

