The flaw in your theory is that if the PS3 was significantly cheaper than other BR players it would sell on that merit alone. Thus, enabling Sony to drop the manufacturing costs of BR hardware and ensure BR wins the format war. Which means people really start buying BR disc.
With me so far.
Then people will want a better looking, smaller, better quality HD video player and will want to shift the PS3's to kid's rooms. So what will they buy now that they have a decent BR library? A stand alone BR player that is dirt cheap. Then all of the other hardware manufactures will rake in cash, especially if they are part of the BR group.
The BR group as it stands now all get a cut in the BR royalties, so if PS3 wins they all win. Also, if I am not mistaken, one of the reason's Sony was able to take a $200+ loss on each console was because the other BR partners and manufactures gave Sony $ to lessen the loss.
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