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A month after the PS2 launched, the Sony 530D DVD player was being sold at $320, $20 more than a PS2, and all the 530D could do was play DVD's.

Yes, you could get DVD players for cheaper, but they were, at the time, shitty brands of the day.
A lot of the good brand DVD players still hovered around the $300+ mark, which made the functionality in the PS2 a big selling point for a LOT of people.

You can try to downplay it all you want, DVD functionality was a major draw when the PS2 launched