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The PS3 is a ploy to get blu-ray into homes. They are accepting losses so they can get their media format across, cause they will more than make up for the losses that they are accruing due to the cost of the PS3. The real question is how long will theye accept losses in production, before they make drastic changes? This almost reminds me of a Microsoft strategy with internet explorer in windows. It killed netscape navigator, and they lost money because they didn't charge for it (like most browsers before), yet in the end they killed competition and pushed there format further upon consumers. This is of course, just speculation.