Of course it was a mistake.

The only mistake that really matters all that much is the price. Sony had all the exclusive third-party support in the world, the brand recognition, etc.

Had the PS3 launched at $299, its sales would be a lot better right now, and the 360 would have been largely ignored(especially in Europe and Australia) as most people would have bought one just because they had a PS2. Wii sales would probably still be through the roof, but more people would just have a PS3 and a Wii at the exclusion of a 360.

Of course, it did play a major role in killing HD-DVD, and if Blu-Ray becomes the standard format, then it may not be that big of a mistake from a company standpoint.

For the long run more disc storage is needed for impressive high definition games (The PS2 already maxed out DVD with less demanding 576i graphics and lower quality less demanding sound, already even for Metal Gear Solid 4 sacrifices had to be made to fit on 50 GB disc). Techical benefits, far more storage space, constant predictable streaming speeds for games, high definition Blu-Ray movie support and mandatory scratch resistance. Disadvantage costs.

Long term advantages for Sony by including Blu-Ray drive in the PS3, high definition movie format war is already over (far faster than anticipated), more reasons to buy a HDTV due to more and better high definition content (games and Blu-Ray movies), mass production of Blu-Ray drives and discs reduced the production costs.

The Cell also does and will show its worth. Short term disadvantage, radically different regarding some aspects compared to other CPU designs (requiring game engine redesign), benefits include again radically different approach and thus much higher potential performance for games developers to tap into for multiple purposes. The CPU provides an extremely good performance per Euro / Watt ratio.

The PS3 is just ahead of its time, yes there's a lot of technology in there like Wi-Fi, BlueTooth, default harddrive, Blu-Ray drive, Cell processor / more expensive low latency main CPU RAM, enormous internal bandwidth, etc. But due to this it should also allow the device to survive longer than either PS1 or PS2 with such high specs. Selling a PS3 specced device 2 years later will probably not have improved potential lifetime sales. It would take longer for developers to adapt their game engines, it would have taken longer for production costs to drop, it may have benefitted PS2 sales, but the Blu-Ray / HDTV attractiveness for consumers would have been far less at this point as well.

To compensate initial costs, the profitable PS2 still performs pretty well for the lower end market (while the PS3 is sold as a high end product), which wouldn't be the case if it was discontinued like the GameCube and XBox. Blu-Ray movie and additional Sony Bravia sales.

The inclusion of the latest state of the art technology also allows for more hardware cost reductions through R&D. For example Sony already developed a much cheaper slimmer Blu-Ray drive. Price is an important factor, but the PS3 already has a healthy install base and games will become more impressive and pricing will drop.

"BluRay killed HD-DVD"
In the long run this will pay off for Sony, the money/shares they lost on the PS3 will pay off in blue-ray sales.

I stopped by my local Blockbuster and there was a big floor space that was empty, I as the clerk why, and he said it will be the PS3/blue-ray section, if retailers push HD/blue-ray this holiday, then it will be big for the PS3.

Took you a good two years to realize this?

op thats a ignorant way to look at things, try looking at the big picture.

BR already won their strategy has already been proven to be the right no no matter what a bunch of fanboy kids say.

They did not just choose a high price, they had no choice the hardware they used simply cost that much and more. They lost around $200 on each unit there was no way it could be priced any lower.

It was no screw up, it was a calculated risk backed by called long term thinking.

yes price was a mistake

but the content was also a problem

releasing a supposed crazy technology for 600$ when u can play better games (based on review Gears of War was a PS3 killer) for only 400$ !!!!

price + content killed the PS3 during about one year

How did you figure that out? Was it the price drop? Or the fact Sony took out the EE? Or maybe the release of the 40 gb. You sure were quick to figure that out.

 Captain Obvious has spoken. Now, fly away lol

Partially, you are right.Wholy, you are wrong.The Wii offers too many innovations the PS3 does not.Its 'simple yet wonderful' attracted consumers.There were quite a few quality works in the making.The PS3 focused on turning the system to a computer.Playstation is the name,but where was the 'play' support by Sony?They took a totally wrong path.I would explain this in great detail if I had the time.May come back tomorrow to do so.