The Price: PS3 anticipation was so high that Sony was drinking their own Kool-Aid. They figured that the Playstation brand alone was so strong that everyone would just accept the console for $600. For what it offered, maybe the price was justified, but a lot of that stuff meant NOTHING to the average consumer.
The Cell: Since the days of the PS2, Sony figured that since they were number one, developers would have to figure out how to create on their systems or be left in the dark. The 360's games at the time weren't at the level that they were during the PS3's development/launch. Sony figured that they were still the only game in town.
Dev Kits: I have no opinion on this.
Competition has a lead: Sony was never the first console to the market. The Saturn and the Dreamcast beat the PS1 and PS2 to the market. Sony even said that the one year head start was no big deal. A member of their PR said that they would overtake Microsoft's lead as quickly as possible and move on. Sony was an expert at kicking Sega's ass, but Microsoft has a lot more resources to draw from.
Blu Ray: Sony's consoles have always launched with the next big media phenomenon. This time, it was the Blu-Ray. Only this time, Blu-Ray is a harder sell to the average public. The difference between CD's and Cassettes or DVD's vs. VHS is not the same as Blu-Ray vs. DVD. Many consumers just don't see the difference. A lot are just content to see a movie. All of the bonus features in the world couldn't justify the upgrade. Even now, while I have a Blu-ray player I'm more inclined to buy a DVD. It's just easier to watch on my laptop, portable DVD player, other rooms, or a friend's house, rather than being confined to my one Blu-Ray player. Sony over estimated the consumer. Not everyone appreciates HDTV yet.
At launch, I was extremely dissapointed buy the Xbox 360. It seemed to be nothing but a slightly more powerful Xbox. By the time the PS3 rolled around, the second generation of 360 titles were able to keep up with what the PS3 was promising. Other factors like online and third party exclusives/multi-plats were unforseeable. Sony just took too much for granted.
