Most people don't realize just how crafty Sony's strategy has been. Remember, this is the only company in the world which defeated Nintendo at its own game - broke the Big N's near-monopoly over the game industry with the first Playstation, partly because it played cheaper CD discs instead of expensive cartridges. At the time, Sony's success was more accidental than planned, but the success of the PS2 and PS3 (yes, it's selling well) was no accident at all.
The PS2 was designed with a built-in DVD player, and was exactly the size and shape necessary to fit into TV cabinets, with a price point to match, and had a ton of third-party support. This was risky, because the DVD market was just taking off in 2000, but it paid off.
Sony then applied the lessons they learned to the PS3, the first true mass multicore device for consumers. They knew they couldn't just release PS2.5 and hope to survive against the 360 or whatever Nintendo came up with (they knew the House of Mario would be a ferocious competitor). Also, they had to be careful not to kill off the PS2 prematurely.
Solution: design a beast of a machine, which handles all media with aplomb, has next-gen BluRay, online, a huge hard drive, wireless, etc. It's so powerful that they gave the PS3 lots of curves, so people wouldn't stack it on other AV equipment and stress it or cause it to overheat - there will be a sturdy, stackable slimline version by 2009, of course. This cost them short-term sales, especially in space-conscious Japan, but they needed a machine which could handle the media streams of 2010-2015.
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