"Yeah the original isuppli page from 2006 is gone but other websites mention that it had RSX at 129 dollars and Cell at 89 dollars at launch. I think the Bluray drive in the PS3 cost Sony around 200 dollars at launch."

Wow, that is a crazy high price. Remember Sony doesn't sell the PS3 directly to many consumers - they sell it to store which usually want a nice markup. So Sony had to subsidize the cost.

Additional Question - should Sony have just kept the PS2 for another year till the prices went down on the PS3 components? (And say launched at a lower price in 2007 with something more like the '09 Slim?)

With just some the money they subsidized on the PS3, they could have undercut both the Wii and the X360 to keep the PS2 sales super high - then lead people into upgrading to a PS3 when it was more cost effective.

At the start, the results of having a blue-ray probably meant much fewer sales due to price. However once the price came down (and the slim version came out) I think the opposite happened - the blue-ray was an advantage over other consoles and probably contributed to ps3 sales significantly. Looking at it overall, I suspect the ps3 would have done better had it had a lower price and no blue-ray at launch (looking at ps and ps2).

That's crazy that the best CPU on the market then and still one of the best now cost only $89 for Sony, can you imagine if something very similar was release to the public it'd probably be like $1000.

Yes, having bluray was essential for PS3 to stand out. Even though I personally did not have a "need" for a bluray player, I eventually bought one a year ago. $65 LG. I actually still use my DVD player (Xbox 360) + stream quite a bit. DVDs are quite cheap when buying them used (Amazon), so I'm glad there was extra competition on the market with bluray.

It sure was an investment, but look at where PS3 is now. They didn't need to compress games. PS3 normalized bluray for a signification portion of people.

Xbox 360 is the living proof that blu ray wasnt necessary at all

I don't know where you get the idea that hd-dvd was better. Blu-ray has more storage and higher data transfer rates. It was however rushed into production since hd-dvd already came out, so the early blu-ray discs were stuck with single layer mpeg-2 video.
http://en.wikipedia.org/wiki/Comparison_of_high_definition_optical_disc_formats#Technical_details

The 2x blu-ray drive is about on par with the minimum read speed of the 12x dvd in the 360. It doesn't however have the luxury to put stuff that needs to be accessed fast on the outer rim since blu-ray has constant data transfer speed. Data on the outside of a dvd is read about twice as fast as on the inside. The constant data transfer rate is also the major factor why the ps3 needs so many installs. Seek times on blu-ray are slower since the spin speed of the disc needs to change when repositioning the head. CAV is much better suited for data. A 4x cav blu-ray drive will blow 12x dvd out of the water. That's what Sony should have put in the slim.

And sure the world of Skyrim might be big but it's also extremely repetitive.

I'm glad sony put a blu-ray drive in the ps3. Their player is so much better then the hd-dvd add-on. And it would have sucked if both formats had been going on for longer. At least this time the better format won.

My two cents for this discussion.

1) I think the inclusion of Blue-Ray was important for the success of the PS3. Remember that back in 2007 there were basically no sources for HD content except Blue-Ray and HD-DVD disks. Dedicated HD players were almost the same price as a PS3. The price tag of the PS3 was huge (600€ in Europe, which was roughly $800 at the time), and without the Blue-Ray player it would probably fall to 450€ or something; but the idea that you could get an HD player for so little extra cash was attractive.

2) I ignore whether Blue-Ray is dead. My instinct tells me that many people prefer having hard copies of their movies rather than an elusive right of streaming something. If you have your own hard copy of a movie, you will be able to see it (or lend it) whenever you want, whether your digital content streamers want it or not. Personally, I rent Blue-Ray disks online, which are then sent to me by mail. I have access to digital movie streamers but I think they have worse content and are more expensive; also, the online video club's interface and features are so much better.

3) The same as in 2) goes for games. I always prefer having a hard copy of the game instead just a download. (With the PS Vita this is truly vital because games rapidly eat up all disk space.)

As a conclusion, the Blue-Ray player of the PS3 was undoubtedly a decisive selling point for me. I, my wife and especially our kids have watched hundreds of movies in our PS3 since its launch.

No. Without blu-ray the PS3 would have been cheaper from launch and it would have a much larger market share (with comparable losses though). The profits from blu-ray do not make up for this, otherwise Sony wouldn't have the problems they are facing now.

i agree that it would have sold much better if it did not have it at launch, but I've had my PS3 for a year now and I'm really glad I got it.

no

noone watches blurays or dvds they download em at least the majority of gamers do

lot of games this gen havent taken advantage of it some of the exclusives that did it was rumoured that it was non gaming info for piracy or that it was the cinematics taking up the space

bluray drive in ps3 is slow as hell load times suffer compared to same game on 360 and thats even w/o a 360 install