Ever heard of the phrase "jack of all trades, master of none"? Where you do a little bit of everything, but can't do one thing really well? I give you Sony Corporation and the home movie and gaming industries. It is hard to blame Sony for trying to use their success in the gaming industry to breathe new life into their DVD sales which is being plagued by staggering demand and falling prices (thanks to a flood of used DVD sales) . Just look back to the huge success of the PS2. Why wouldn't the execs at Sony try to duplicate the dynamic duo of gaming and DVD playback of the PS2 with the PSP and the PS3. One would think that the heroic brain trusts at Sony came to the call when Joe Consumer called out "Give us Blu-ray and UMD!" But that's not what happened. To say that the proprietary UMD format and the high definition DVD Blu-ray are contrived markets would be an understatement. To the consumer, the rise of the DVD made sense. So did HDTV. But HD DVD? Why? The leap in quality from VHS to DVD and regular TV to HDTV were huge. But put DVD next to Blu-ray or HD-DVD and the difference isn't nearly as compelling. Consumers were more than ready to dump their VHS tapes in favor of DVDs because of the ease and vastly superior quality. There has been no such rush for the average consumer to adopt high definition DVD. This and the fact that the market is still trying to invent itself with the HD-DVD/Blu-ray war and you get a big yawn from Joe Consumer. Sony executives are evidently of the opinion that Joe Consumer can easily be manipulated into adopting whatever newfangled product they shove down the pipe. Rather than allowing the market to form on its own, Sony is trying to push and prod Joe into buying their new formats whether the consumer wants them or not. The PSP UMD movie format was an absolute failure and yet Sony somehow felt the Blu-ray movement would be much different which is why they are forcing every consumer that wants a PS3 to buy a blu-ray movie player at the same time. But will the fact that Sony is trying to invent a market that does not yet exist be their failure? Microsoft thinks so. They offer a HD-DVD player separately from the XBOX 360 and for good reason: those that want it will buy it, those that don't, won't. But Microsoft isn't tied to the movie biz like Sony is and so their interest in seeing HD-DVD succeed is not nearly as high as seeing the Blu-ray fail. Imagine the consumer is stuck in an elaborate maze of Sony's design and can only get the cheese if we follow the complex path Sony has laid out. Want a PS3....you get a blu-ray too....and how about some blu-ray movies....and a nice Sony HD television as well. Except, of course, that in this case, the consumer does have the choice to not enter into the maze at all. It is a new market that Sony is trying to invent, one that is predetermined by product manipulation. And we see even more manipulation with the PSP. Months ago we heard of the ability to download old PS1 games to play on the PSP would be coming. That was all fabulatastic, except for the fact that Sony pulled a "gotcha" in the end and decided the PSP could download PS1 ONLY through a PS3. This, despite the fact that there is no technological reason for that requirement. Like their attempt to merge gaming with their blu-ray movie format, Sony decided to force consumers to buy two products when they only needed one. Is this too just part of the big Sony maze? Consider this: Sony's actions with their gaming products have been tied in one way or another to their home movie interests. That begs the question: would the PS3 requirement for PS1 downloads to the PSP have been created if the UMD movie format had been a success? In the end, Sony may find that one of their more successful products, the PSP, may have been severely hindered by their high level of product dependency. Or maybe the PSP's sudden lack of appeal in selling movies has cast the PSP/PS1 download ability upon Sony's sacrificial alter? Either way, a great feature for a promising handheld may have been squandered in the process. By trying to dominate both the home movie and gaming markets, Sony has, in effect, manipulated itself OUT of the position of dominance that it once had in the gaming industry. Sony is losing money on every PS3 and demand is not what was expected. In a year, maybe two, the next-gen market will be fully fleshed out, but the movie format war will still be raging unless some dramatic truce between the two camps is achieved. The fact that Sony is gambling in both with the same set of dice may be the undoing of an incredible era in gaming. If I'm sitting in the Microsoft or Nintendo camp, I have to like the odds.

I dont think Sony is losing money on each console sold ....to be brutally clear the reports that have hinted for a 800 dolar cost for each PS3 are work of people without a glimpse of knowledge in economics .You can add up the cost of teh components as they would cost you in the store as much as you want ,but the reality is that for the manufacturer of those components the cost isnt so high .....I mean a BD reader can cost you 150-200 dollar but it is bordering in insane to assume Sony ,manufacturer of BD readers ,spends 150-200 dollar for each BD reader included in a Playstation 3 ....

Actually yes, Sony is losing money on each PS3 sold. link

This is what I was talking about ....the analisis by Isupply seems to consider that for Sony as manufacturer of many of the components the cost is the same to produce these components as the cost for an individual if he goes to the store and buys a 7900GTX ,a Blu Ray reader ,a 60 GB hard drive etc ...and assuming that is a bit lunatic if you ask me .

Good post, if a little harsh. I have just posted something corroborative in the Ps3 wins best console award from IGN thread by Doctor Wii...

I dont need a degree in English ,I am from Spain after all and my english serves me about right for what I need it usually . What you are saying is basically what I was saying is a bad approach at the matter .Comparing the prices you can buy the components to the prices Sony is buying those same components is an absolute nonsense .Wherever you find those components they have already the incremental cost of all the intermediaries ,transport ,profit for the selling company and profit for the shop .Sony doesnt have most of those creating the console .Plus buying in big numbers the components means they receive a non-negliable discount called "rappels " that iisuply simply has ignored . That article ultimately isnt a very good one .

Well, I meant the bit about a degree in English jokingly as I remember you saying you were from Europe in another post, but sorry if it offended you. Yes, what I was saying is what you were saying, however you didn't take note that iSupplies figures were considerably lower than the retail cost, indicating that they did indeed take everything you mentioned into account. I'd like to ask you if you actually looked at their analyst on their web page, because if you did then you would see how iSupply takes all of these factors into account. You would also see that many of the components in the PS3 aren't actually made by sony, such as the RAM being provided by Samsung. Again, you don't seem to take into account that sony purchases many of the components for the PS3 from other manufacturers, and although it is considerably lower than retail cost, it's still more expensive than sony producing it themselves(which is what you assume) I will state this again just to make sure it's clear: Isupply does not take retail cost as a baseline for their analysis of the PS3. They know what many of the components cost to manufacturers is, and estimate how much IT COST SONY to produce the PS3. Also you seem to deny that the PS3 is being sold at a loss, which simply isn't true. It uses the razor and razorblades business model, and this fact is well established and acknowledged by many in the industry. And for some reason my former post is now gone. If the admins deleted it because of the English comment, then I am sorry for the misunderstanding. You could have simply edited out the offending passage as opposed to deleting the entire post.

Sony happens to be very successful in most of their ventures. Their bravia lines are among the best moth in quality and sales and also up there are their cyber shot line. In my eyes they are not as good as the Powershot from cannon but the come the closest. This is a well written and though out point of view but it is evident you had something against Sony when you started this. Now try if you can to put aside any complaints or criticisms of Sony that you have gleaned off of other people and question logic. Did Sony try to strangle the market with a new media format such as the umd? Keep in mind that Sony has been working with the blu ray group since 98. How many burners were introduced? Players for the home? How many practical applications could you have with a 1.8gig disk that you couldn't with a DVD? I don't buy any argument against UMD other than the fact that it was too expensive. I scoffed and laughed at the movies but it works fine as a distribution method for games. On an HD television the difference between DVD’s and any HD format is huge. Unless it is upscaled, even then it is noticeable. Let’s clear the air here about Blu ray. Sony is the spearhead for this format but they were never the sole creators and they weren't even the first to bring blu ray to the table. They were among nine companies. Media change is never supposed to happen overnight but if you are paying attention it is happening pretty fast. A large portion of the world is hopping on the HD bandwagon and all the major studios want to reduce it to one or two formats that they can transfer and distribute easily. What ever is good for the production companies will eventually be good for the consumer. I for one was mildly excited about the HD quality movies because soon you can probably DL these new movies to a media center. What is exciting about Blu ray is its storage capacity and if the tables were reversed I would support HDDVD more if it could hold more space. Your arguments against Sony and blu ray are obviously biased. How do you think markets evolve in the first place? Products are offered and it is up to the consumer to purchase it or leave it alone. I am sorry but my DVD's have been sitting on the shelf for quite sometime and none of them "evolved" into a next gen format on their own. The Blu ray movement was started way before UMD's were introduced and it has an outrageously large following. It was noticeable how most companies were holding back until BR issues were resolved and it becomes very apparent when you look at the 2007 lineups for both BR and HD exactly which format has the most support. MS is only supporting HD-DVD to spurn competition. The have said so themselves that they believe the future is in digital distribution. I love the idea of a BR player being in the PS3 because it excites me to see what the Devs can do with the space if they choose to use it. AS it stands now, the loudest way you can protest Sony's inclusion of BR into the PS3's are by not buying it. Why wouldn't they include BR into their own device? It is their choice. Have an issue with magic gates being used in the PSP's or the cybershot's. People are whining, and I use that term lightly, about what Sony does when all they have to do is simply not purchase it. Even if blu ray fails as a movie medium the PS3 users do not lose out because they still have a disk with a large storage medium to play their games on. You are sadly mistaken if you think that Sony masterminded the HD market proliferation and it is quite sad. Again as far as the PS1 DL's for the PSP it all amounts to whining still. God forbid SONY wants you to by another SONY device to transfer a SONY owned game to another SONY owned system. Not getting how silly the whining sounds yet? Sony's sales are pretty strong for a system that is $600 dollars and I hear from many people that they are still going to get a PS3 they just need to save. More fence sitters will most likely come over when they see multiple exclusives hit the PS3 that tickles their fancy. Calls for sonny’s death are premature and seem increasingly desperate as every minor issue is blown out of proportion. This generation will be an interesting one indeed.

Isuppli sounds similar to what lynch said. XDR RAM is more expensive than any other ram 256MB + 256MB of GDDR3 RAM will cost about $100 Not to mention that it is never pointed out that some of the components might actually be fabricated inhouse..... I don't know..... something about sony being one of the largest electronics company in the world.... owning god knows how many factories and reanting/leasing god knows how many others.

Well, there might be something about two companies, one specializing in estimating electronics sales and the other a top investment and market analysis company, and them finding a similar cost that..I don't know..might indicate that they did take Sony's manufacturing ability into account....and maybe have some people who specialize in this field...and went to college to do this..and get paid everyday to do this...who might just know how to properly estimate the cost of a consumer electronics product..and might be... I don't know..smarter than some random person on the internet...