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Sony's problem was also microsoft's problem - having 2 different systems that are pretty different. You COULD have got a 20 gig for $499 or whatever, but would it really have been worth it? Since you're already spending that much anyway, you gotta go for the $599 system! And thats why they stopped producing 20 gig versions, everyone was avoiding them. Maybe Sony needs to go back in time and just put a DVD drive in the stupid thing, and it would cost 300 dollars less to produce anyway, plus the R&D costs. Then they could have released a system more powerful than the 360 for the same price. But no, they HAD to include the Blu-ray, and use the gaming division to meet their other departments needs. Sony could have won this console war easily, but instead it took them an extra year to release the PS3, and when it did come out, it was way overpriced. That is the cost of Blu-ray.