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I agree the price was a major problem.

Even my PS3 owning friend who will hear no wrong said of Sony, did a double take at the sticker price.

It was an expensive launch day for him. The console + spare controller + HDMI cable + RFOM and MOTORSTORM set him back 575 GBP (1150 USD). Still he seemed happy with it particularly as he still has access to his PS2 games through BC.

The price issue has been resolved mostly. Its still pricey for a gaming console but good value if you like HD films too.

A more problematic issue is the CELL chip. Wait Wait I'm not about to bash the CELL. I am however about to bash Sony.

They knew that the CELL would be complicated to develop for and the learning curve would be steep. So why I why did they not court and get developers onside early in the game.

The initial tools were lacking and as a result it has taken nearly 3 years since first DEV KIT release for the developers to finally begin to get some realistic performance increases from it.

Its like selling a Ferrari with a 30 mph limiting device strapped to the engine.

I think the problem for Sony is now to differentiate the PS3 from the XBox 360.
I know that fanboys scream that various games look better on their system but lets face facts. To the casual user the graphics look identical.

Sony have done well to claw back ground in the last 6 months, but it could be a lot harder in the next quarter. MS will cut prices further and Sony need to retaliate with a gaming line up that shows all people, not just the technically proficient fanboy that the PS3 can provide a quantum leap in gaming over the competition.