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Darc Requiem really sums it up nicely. My only addition is what Sony should have done is left Blu-Ray IN (it needs to win that war....) but left that Cell Processer out. It only needed to be comparible to the Xbox, not necessarily better (or even as good as).
Their has yet to be a generation where the most powerful system has won (they often lose miserably) so why Sony went with this misguided route is beyond me. Even a dual-core processer with Blu-ray and a $399 price point would have made them far more competitive than they are now.