As many of yall are well aware of. The PS3 did not do as well as Sony and many other people expected, failing behind both Nintendo and Microsoft this gen. The PS3 has lost Sony a lot of money and not only that but the Playstation brand itself does not seem to be as strong as it once was.

Was it the Marketing, Starting Price, Online Service, Decline in 3rd Party Support?? Many of these factors could have contributed in the fall of the once strong and powerful Playstation brand.

With this said, What do yall think Sony could have done better this gen to have made the PS3 have a chance to do just as well if not better than its predecessors... (PS1/PS2)

Simple - Look at Why PS1 and PS2 were success and use them as a blueprint, not Xbox 360

Going with an off the shelf processor would've saved them a lot. Same thing going with 512mb unified DDR3 instead of 256mb XDR and 256mb DDR3. Going with DVD over Blu-ray would've saved them another $100 or so, too.

I kinda want them to stick with the Blu-ray drive, though, and I think just not going with proprietary or high-end solutions for their CPU and RAM would've allowed them to drop the price to $399 for the base model at launch.

That's really all that would've been necessary, methinks. Though remove Blu-ray too, and they probably could've launched within 6 months of the 360.

Of course, this is all wild speculation based on nothing more then general ideas of component costs. We'd need a specific breakdown of launch costs (the best we've ever gotten were the iSupply estimates) to really say what they could've done.

Edit:

Though they got screwed over by nVidia too.  The RSX came in too late, too hot, and underpowered relative to the 360's GPU.  Going with ATI would've been the better option, in hindsight.

lower the price

I think the price tag of $500 and $600 was a big slap in the fanbase face. Weak launch titles also play a big part. Underestimating both Nintendo and M$ was also another mistake.

No bluray, and the move at launch which would be moved to 2005.

They used it as platform to push new technology, the cell which failed commercially and blue-ray which hasn't really taken off as well as DVD did either. Both of those things made the PS3 expensive to produce and gave the PS3 some serious weaknesses, without them the PS3 would have been alot more competitive.

Give pie with it... everybody loves pie..

1: Architecture:

• CELL was a mistake.
• Two different types of RAM was a mistake
• The controller just doesn't feel right to me

2: Games:

• I want to play The Last Guardian, it's 2012, and I'm still waiting...
• GT5 just took way too long to create, I know some friends who didn't buy it just because it took to long to release
• Games are just unnecesarily tricky to develop perfectly for the PS3, this again this in with the CELL being a mistake

3: Price:

• Again... the CELL...

The one thing I would say they did right was Blu-Ray, it might have been expensive, but it was worth it IMO to push it.

Make it easier to develop for as it turned off many developers and extended development time for games in the launch period. Make it cheaper and more accessible. Advertise more. Nuke the USA. There are many things they could have and should have done.