Nintendo and Sony both looked to expand their market. Nintendo with Wii Sports and accessible controls for new gamers and Sony through Blu-ray and multi-media.
Problem is this:
If people buy a Wii for Wii Sports or Wii Fit, it's a game, and they'll eventually tire of the game and look to buy another game for it (like Mario & Sonic or DDR and then move on to other more complex games from there).
If people buy a PS3 as a cheap blu-ray player, what is there motivation to buy a game like CoD4? It's not accessible to noobs, nor are most other PS3 games. So they'll continue to use it as a blu-ray player, and maybe to download stuff.
To compound this: Nintendo makes a profit irregardless of a single game sold or not. Game sells are just gravy to Nintendo.
Sony is totally reliant on a large attach rate to off-set initial losses on console sales. If even a small % (say 10%) of PS3's are just blu-ray players, that will substancially affect Sony's bottomline. Now obviously they are making some kind of profit off Blu-ray, but that's going to another division, and their games division is going to look like a losing cause to investors for a long time now.
Not suggesting this is the death of PS3 or anything, they can still become profittable, eventually, if it is a 10 year system. And I'd like to see Sony succeed. But it is an interesting dilemma Sony has put themselves in.
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