Even after it was released, Sony's console was plagued with problems. The PlayStation 3 was quite expensive, especially compared to the 360. Even though it had a much superior hardware, not many people found it worth investing Rs. 40,000 in what they thought was essentially only a game console. Pricing aside there were other issues as well. Developers complained about the difficulty in coding games for the PlayStation 3, whereas they had no problem at all doing it for the 360, due to its similarity to a regular Windows machine.

The games that came out initially weren't that great as well and the cross platform games often worked better on the 360, while the PlayStation 3 version was riddled with poor graphics and slower frame rates. The fact that the games themselves (being on Blue-ray discs) were much more expensive than the 360's didn't bode well with the consumers.
Design & Hardware
What Sony has done here is not new. They have done this before with the PlayStation 2 in its mid-life, wherein it was robbed of its sliding disc mechanism and a hard drive but was morphed into a slimmer, smaller and lighter design that was not much thicker than a diary. The new design breathed life into the sales of PlayStation 2. With the PlayStation 3 Sony has done more or less the same (and hopes for a similar response from the consumers), and here we will outline all the differences between the new and the old version.
First of all is the obvious difference in size. The new PlayStation 3 retains the same basic shape of the older PlayStation 3 but has a much smaller form-factor. This might not be noticeable at first sight, but place them side by side and the difference is astonishing. The curved top means you still can't keep things on top of the PlayStation 3 and it continues to reserve the top position over your audio equipment. The new PlayStation 3 is also much lighter and easier to carry. Build quality is just as solid as before.


The new PlayStation 3 loses the gorgeous glossy finish of the older version and gains a new matte finish. Due to this the new PlayStation 3 does not look as striking as the previous version; the older one was much more of an eyeball magnet but the newer version looks more timid in comparison, as if it is trying hard not to be noticed. You do get the new stylized 'PS3' logo in the new font however, which is the only interesting detail on the top. Unlike the PlayStation 2, which was also officially called the 'PS2', the PlayStation 3 was called just that. However, in the new version we see the so far unofficial name 'PS3' being used for the first time, officially.

The disc mechanism is in the same place as the previous version, however, below it you can now see two physical buttons, instead of the touch sensitive 'buttons' on the older version. We found these to be better than the previous version and felt more tactile to use. They are backlit as well, which make them easier to find in the dark. The new power indicator lamp can only be seen from the top and is too dim to see in bright light. There is a blue indicator light above the eject button, which lights up when you have a disc inserted.
Above the drive slot is the famous 'PlayStation' logo, this time in just white instead of the red, blue, green and yellow version. But unlike the previous PlayStation 3, the logo on the new version does not rotate. This is perhaps because the new version is not designed to stand on its own vertically. It's not that it doesn't stand at all, but it doesn't stand securely like the previous version. Just like the PlayStation 2 Slim, it requires an optional stand that needs to be purchased. We found this to be an annoyance as Sony could have easily designed it to stand vertically and only changed a perfectly good design so they could earn a few more bucks by selling the optional stands, just like they did with the PlayStation 2 Slim. 
    
Below the disc mechanism, you can see the two USB ports on the left with the status LEDs for the hard drive and network activity. On the right is the slot where you can access the built-in hard drive. The new PlayStation 3 still uses the same notebook PC hard drives instead of the proprietary drives like on the Xbox 360, which means you can easily buy one for cheap and upgrade the memory.
 
On the back you see all the same ports as on the previous version save for one small omission. The power button on the previous version has been removed on the new PlayStation 3. Apart from that you get the same HDMI output, proprietary audio-video output, optical audio out, Ethernet port and the power port. Unlike the 360, which has the massive external power brick, the PlayStation 3 has always had an internal power supply, and kudos to Sony for managing to retain it even in the much smaller new version.
 
As far as the hardware is concerned, the new PlayStation 3 is mostly identical to the older version, save for one difference. The newer version uses a 45nm Cell processor as compared to the 90mm in the previous version. The smaller fabrication allows the Cell processor in the newer PlayStation 3 to run cooler and also consume less power.
 
Connectivity-wise the PlayStation 3 still supports the same formats as the previous version. You get Bluetooth v2.0 and Wi-Fi 802.11 b/g, which to be honest feels a bit outdated. We expected to see Bluetooth v2.1 and 802.11n support in the newer version. You also get two USB 2.0 ports at the front, where you can connect external drives, keyboards, mice and other accessories, such as a gaming wheel.
 
The guys at iFixit have done a complete teardown of the new PlayStation 3, which reveals the interesting innards of the new console and how various things are packed within that fairly compact body.
Software
The new PlayStation 3 uses the same software as the older version, except for a couple of differences. First of all, the new version does not have support for installing another operating system, such as Linux. Now I'm sure most people would not care much about it but there were quite a few who bought the original PlayStation 3 not just for its gaming and multimedia capability but also because they could turn it into a computer by installing Linux on it.
 
A new addition to the software is the support for TrueHD and DTS-HD MA audio. The new PlayStation 3 can now stream these two lossless audio formats to a compatible audio system, so you can enjoy better sound clarity. Another addition is the BRAVIA Sync feature, which upon connecting to a compatible Sony BRAVIA television would let you control the PlayStation 3 through the TV remote control.

The new version also comes with VidZone, which is an online music video download service and allows the user to access free streaming of music videos from the VidZone.TV website. The VidZone catalogue encompasses over 1.5 million tracks, 25,000 music videos and 15,000 realtones, including full access to catalogues from Sony BMG and EMI.
 
Apart from these it is the same XMB menu from the previous version. It still looks great, especially after the new theme with the sparkling effect in the background, and is very easy to use and navigate. The software can be upgraded over Internet or you can download the file from the PlayStation website and then transfer it to a USB flash drive and install it on the system.