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EvilChronos said:

This is the easiest way for sony to win. 3 simple things that could win it all for them. They know it, we know it, microsoft and nintendo know it but for some reason it STILL has not happened. Heres hoping for next year...

1. Complete software driven backwards compatibility for all ps2 and ps1 games. "that means downloading patches and updates that let u play ps2 and ps1 games for those who dont know".

2. A ps3 80 gig model bundled together in 1 box with Little big planet, dual shock controller, hdmi cable. All for the reasonable price of 299.99.

3. Stop production of the ps2. "the ps3's biggest competitor/enemy is its own brother"

These ideas would be godawful expensive.  Why do you think Sony discontinued backward compatibility with the PS2 for the lower end PS3?  For one reason: money.  It isn't that software backward compatibility was costing them even $6 per console, it was that it was costing them PS2 sales and high end PS3 sales.

The PS2 was a massively profitable product and still is.  The PS3 is a massive failure.  It would literally make more short-term business sense to discontinue the PS3 and keep the PS2.  However, discontinuing the PS3 would be the death knell for Sony games producing their own console ever again.