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IMO Sony can afford to take another initial manufacturing loss, it will be made up in licensing PS3 will drop its price, Sony already hinted at it and will follow though once some of the chips+blue-ray diodes are cheaper which will most likely be around may/june. All backward compatability issues will also be resolved with upcoming firmware releases. The last 2 generations have been won by PLAYSTATION, Even Wii users will by one after the novelty wears off and amazing eye-candy and fun titles like GTA, god of war and shadow of the colossus and original IP's come out this year and the next. 115 Million+ PS2 consoles worldwide and still selling... Sony can afford to take another initial manufacturing loss, it will be made up in licensing Once Sony pictures puts its entire DVD catalog and future releases on BR, people will like the fact that "ONE BOX" can do it all instead of having to switch around inputs and remotes to watch movies and play games. Which is Sony's original intent...and it is STILL the cheapest blue ray player...and the format war was already decided by disney, panasonic, apple and a slew of other companies... So PRICE is the only deciding factor right now...and the real war is between the 360 and PS3 not Gamecube 1.5. The PS3 will outsell the Wii in a year, tops. and have outsold 360 by this time next year. Watch for christmas 07