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I think Sony's biggest issue is in the choices they made in hardware design and development support...

Blu-ray cost too much but they were hell bent on putting it in the console so they could do HD movies and win the HD battle. But someone forgot the memo about blu-ray's performance for gaming which may be part of the reason why some games have to go on the hard drive. It has the capacity, but not the performance.

The other, is the internal architecture and programability of the system. Microsoft has made it simpler to deliver games on its system. And developers openly agree it costs more to make games on PS3 because of the complexities that developers don't fully understand. If you are a shareholder costing more to deliver is important and most game companies are owned by shareholders.

To me, these were the root mistakes. If the Blu-ray drive would have been a faster device and development for the system easier, 360 would have been toasted by PS3 and we wouldn't be rehashing these threads every few days.

PS3 was dubbed a far superior console that was going to deliver 1080p games all the time. To date, I don't think people feel the results are there. Personally, I love games like MGS4... But it and the currently other PS3 exclusives don't come close to justifying the cost of the PS3 compared to 360. Especially, if your focus is gaming and not HD Movies.