When Sony announced a cheaper, $500 PS3 there was some confusion as to what features would be removed; confusion that both we and Sony tried to clear up. Ultimately, the only non-upgradable feature: HDMI.
Naturally, the majority of consumer confusion has centered on this particular omission and whether or not the PlayStation 3 will support 1080p without an HDMI output. The answer came down to whether or not the content being displayed contained the Image Constraint Token, which would require an encrypted digital connection (using HDMI) to display the full "True-HD" resolution of 1080p. Without HDMI, your fancy new Blu-ray player would be forced to playback your fancy new Blu-ray discs at a measly 540p.
Why hasn't Sony taken any steps to quell the rampant speculation, fear, and misinformation floating around the internets regarding their decision? Well, the answer's simple: they're not sure themselves. Last week Sony announced they would not be downsampling analog connections with their own content, but will the other content owners (read: movie studios) follow suit?
According to recent internet scuttlebutt from reputable German site Spiegel (machine translation), top secret negotiations between a very grumpy Hollywood and some tech giants (including Microsoft and Sony) are looking to delay implementation of the ICT until 2010 or even 2012. This of course helps explain the baffling absence of HDMI on the cheaper PS3 (and Sony's heretofore baffling silence on the issue), and the ongoing absence of an HDMI output on the Xbox 360 (despite what Lik Sang lists).
[Thanks, Fan; via Engadget]