Analysts  probably blame the high price of blue ray drive in the PS3 for losing the the market dominance that Playstaion enjoyed for 2 generations. They will however more than likely win the high def movie war because of it. Was the trade off worth it?

For Sony as a company, yes.

Owning the premiere multimedia format would be very profitable. 

Plus having the extra space gives developers more latitude for game content.

Except for the increased pricetag, it's win/win all-around.

For Sony as a business, YES.

I've seen no real financial analysis to prove the case either way. I've seen plenty of cherry picked data and purely anecdotal evidence being misused to prove one way or the other though.

Absolutely. If you like money that is. But BD hasnt "won" the "war" yet. But IF it does, then yes Sony would be in better shape because hi def movies would cross genre for HD TV's, Players and the PS3......so Sony as a whole would be in immensely better shape than if the PS3 were selling as well as the wii.

 I think based on DVD, VHS any home media format etc. It would be common knowledge that a company holding the patents and most fees for home media viewing stands to make a LOT more money than in an isolated videogame hardware market. Especially the PS3 as it was neevr meant to necessarily break barriers like the wii has. There sonly a certain amount of consumers in line for the PS3 whereas home media can connect to a multitude of people......sort of liek how the wii has connected to an untapped gaming community of all ages.

Businesses stand to make a lot more money on a larger pool of potential sales than an isolated one, so i think it owuld be common sense that controlling the hi def hom media market and computer storage of the future would be a gold mine for sony. 

Yes, absolutely.

The game console leadership position can oscillate generation to generation. Any one generation is not as valuable as controlling the new movie format.

However, Sony admitted they do not anticipate winning the HD format war, and they have downplayed it saying that it's not the ~50 billion dollar windfall over the next decade that they entered it for, but for corporate pride.

BD is a very, very long way from winning the format war.  In actual numbers, they're effectively in a complete stalemate with HD-DVD.  Right now, it's a war of perception: if people think one format is winning, it will have a huge advantage because it will get more support and more people will be interested in it.  However, either format can still get that edge, and the cheap HD-DVD hardware is a comperable advantage to PS3 hardware.

And yet, if Sony, Toshiba and the MPAA want to try to keep HD media prices in the stratosphere, both HD formats will continue to lose badly to DVD for the forseeable future. 

its a moot point b/c it will never be as big as DVD, the trend is going towards just down loading your movies to a Hard Drive and playing them there, so ....

Yes, I think by the time one or both of the new formats become widely adopted they will be obsolete due to internet distribution.

As far as winning, I don't believe any kind of victory possible at this point is complete enough to justify not just losing the console war but also a loss of billions of eurodollarspounds on each hardware sale.

That trend is far, far too small to make such a big claim. Look at music: it's much easier to put music on hard drives and listen to it because an album is about a thousand times smaller than an HD movie, allowing you to store a lot of music on current drives. Even assuming bandwidth is no concern, which it is still for most Americans, and assuming most people are comfortable enough with technology to handle that sort of thing, there are still very big challanges ahead.

And depsite the simplicity and usefulness of online music sales, they're still a small fraction of the overall music market.  The vast majority of music is sold through CDs.

I would argue that neither will be as big as DVD because DVD won't die anytime soon. DVD will likely continue to dominate all other formats for the next 5 years, at least.