Towards your edit from the original post "So Blue Ray has won thanks to the PS3, its as good as official.  Now the real question is will PS3 win becuase of Blue Ray?" and from finalsquall's post "I see domination for the ps3 and yes - will take down the wii eventually, in life time sales" the Wii was already in this thread indirectly (in terms of the PS3 "winning") and directly (by the PS3 eventually passing the Wii in sales).

The PS3 has continued to improve do to a $200 price difference between what was the main SKU when it launched and what its main SKU is today, a lot of game releases, and the dominance of the Blu-Ray format; but that doesn't mean that it will continue to see sales improvements in the future, and it certainly doesn't mean that Blu-Ray will be the driving force of any improvement.

Optimistic projections of HDTV adoption have it hitting 50% of households in 2010, and all of these projections were based off of the ecconomic conditions of 2002 through 2005 being continued through 2010; in other words, they expected higher house values and home equity lines of credit to allow people to make big ticket purchases regardless of whether their income level supported it or not. What this means is that you shouldn't expect Blu-Ray to become a mainstream product until mid 2009 at the earliest (and potentially 2011 with more realistic projections of HDTV adoption).

A reasonable projection for the number of consoles sold at the end of 2008 based on year to date sales would be 45 to 50 Million Wii systems, 22 to 26 Million XBox 360 systems and 18 to 21 Million PS3 systems; the Wii will consistently outsell the PS3 and XBox 360 worldwide through the entire year and will often outsell both systems combined by a wide margin. Regardless of what people think most Wii owners will not avoid third party games, and the "rising tide will raise all boats" meaning that third party published games will continue to see greater and greater sales; certainly, not many thrid party games will see 4+ Million in sales but this is (mainly) do to how low profile the games are (but most third party games will see sales above 250,000 and quite a few will sell over 1 Million). The combination of higher potential sales, higher realistic sales, and lower development costs will weigh heavily on third party publishers and the PS3 will certainly not see the massive bulk of third party support the PS2 or Playstation received; most likely the Wii will have that support.

Now, when the Wii has a 40 Million unit lead on the PS3, a much larger and more diverse line-up, is selling at $100 less than the PS3, and Blu-Ray players are $100 (or less) why are people going to choose to buy a PS3?

Please note, I'm not saying the PS3 is going to stop selling ...

I should add that the PS3's future isn't that tied to blu-ray anymore. It's due to developer support, same as all the other systems. The high price of developing for it has already hurt exclusives, but games have been selling better on it. So it looks as though developer support will be there, but overwhelming support is very unlikely.

@OP: I think the BluRay factor might be there, but significantly smaller than most think. Overall, this will be a very good year for the PS3 ww it seems.
On a related note; I do find it funny that many argued earlier on the web that "no one buys a PS3 for games, only for BluRay", and these same people are now stating "BluRay doesn't matter and no one will buy a PS3 because of it since the price of players is going down. And who watches HD movies anyway?"
Kinda funny, at least to those who have kept track of the format war over a few years.

 Nods in agreement.  Something cause the movie studios to move en masse from both formats to just Blu-ray.  Now, Sony could have bought them all off, but most likely it was due to the sales of Blu-ray players being sold more than HD-DVD ones.  And what percentage of Blu-Ray players are PS3?  A very large percent, I would suspect.

Now, will it help PS3 a lot in the future?  Only if those buying Blu-Ray players keep choosing to buy PS3s.  If Blu-Ray moves into more mass market numbers, some company, including Sony itself if it was smart, will bring out a cheaper player that the PS3 can't match in price, due to the costs of the other components making it a game machine as well.  

Unless, of course, Sony chooses to drop the PS3 price quite a bit.  That is, sell it for the cost of Blu-Ray components, and eat the rest of the box costs.  This stragety goes back to believing that game sales will make up for the loss on the box.  But if it is sold to someone only interested in Blu-Ray movies, that won't help Sony, especially its game division, that much.

@  Branko2166  

Actually, two others bought up Wii earlier.  Just that Squrrielly went nuts about it.  ;)

I have never argued either of those positions, but I have argued against the opposite positions ...

Blu-Ray movie playback and media center functionality is a major selling feature for the PS3, but is not a feature which has wide spread mainstream appeal yet; by the time Blu-Ray movie playback becomes a feature which has wide spread mainstream appeal it is unlikely that the PS3 will be nearly as inexpensive as a stand alone Blu-Ray player.

Blu-Ray "won" the format war even though HD-DVD sold far more stand alone movie players than Blu-Ray did; the reason for this is that every PS3 has a Blu-Ray player and, even if the average PS3 owner buys and rents far less Blu-Ray movies than a stand alone movie player owner, the massive quantity of PS3s (in comparison to stand alone HD-DVD players) ensured dominance in movie sales for Blu-Ray. This is what caused the shift of movie studios.

Outside of gamers there is still very little interest in this format war, and the only reason that it became important to gamers is because Microsoft and Sony backed opposing formats. If you look at DVD adoption, it will be several years before Blu-Ray breaks out and sees widespread mainstream interest; at the same time you have to consider that DVD had several advantages in that it was readily useable by everyone who owned a TV, and it had many benefits over VHS beyond higher quality.

Agree with all but the bolded point.  For many companies, that would be true.  But for Sony to decide to underprice the PS3 below stand alone players, given their record, I'd say that the chances are more than 'unlikely'.   Sony will go back to losing more on the PS3, but that didn't stop them before, now did it?

(Note:  I'm talking about sales price of the PS3, not cost, versus the stand alone players') 

 You appear to have ignored my point about new technology becoming cheaper. The ps3 will likely be approx $300 by the end of the year and hi def tvs are also continually dropping in price thus eventually they will cost the equivelant to current standard def televisions. You can't keep on assuming that things remain still. Eventually when the ps3/360 hit mass market price it won't matter much if the wii is $100 cheaper. At that point people will be buying consoles solely on merit and preferance.

You assume like its preordained that the wii will accumulate a 40 million lead and yet there are so many factors which could tilt the momentum in either direction. The wii may well become one of the best selling consoles of all times but I will reserve my judgment until I see how it does against the competition when all consoles are in the mass market price range.

Right firstly, to anyone in this post that has stated that the PS3 has not seriously helped out Blu-Ray...what are you thinking?  In my honest opinion, the PS3 has been the catalyst for the surge in Blu-Ray and the single most effective element in Blu-Ray's short history that has made it outsell HD-DVD in disc sales for over 12 months and effectively secured the demise of HD-DVD.  It's quite simple.  People buy the PS3, buy Blu-Ray movies and hence, there is more Blu-Ray disc sales than HD-DVD, which basically made up Warner's mind on their preferred side.  Which has in turn, made other companies go Blu and now we are at the end of HD-DVD.

Right, will Blu-Rays dominance help the PS3.  Of course it will, but not in such a huge way seeing as prices of the standalone BR players are now coming in below the cost of the PS3.  Unless Sony decides to drop the price of the PS3 again in the near future.

HD-TV?  Well people are buying into the LCD and Plasma scene at an alarming rate.  They have reached an affordable level, where people are buying multiple screens for their homes.  Pound for Pound, you are certainly getting more for your money, screen wise than when DVD was started.  I bought a 28" SDTV when DVD first started appearing for £650, the DVD players were around £200 at the time as well.  Now I can pick up a 40"+ screen for the same £650, although BR is a bit dearer at £250-£300, so it's very similar IMHO.

Digitial distribution of movies is not going to happen properly for a very long time.  We still don't have good enough broadband speeds, so an HD disc or other hard copy medium is certainly going to be the standard for quite some time yet.

Although all this said, it WILL take a good few years for BR to take off (if it really does).  But I can see no reason why we can't still be using BR in 5-10 years time.

Honest opinion does not change facts. And try looking up some actual articles on this, rather than just assuming we must be crazy for thinking otherwise. It just makes you look like someone trying to draw attention away from you not doing the research.
----------
This is from the latest Associated Press article on this:
http://news.yahoo.com/s/ap/20080218/ap_on_hi_te/toshiba_dvd

"The reasons behind Blu-ray's apparent triumph over HD DVD are complex, analysts said, as marketing, management maneuvers and other factors are believed to have played into the shift to Blu-ray's favor that became more decisive during the critical holiday shopping season."

"Adding to Blu-ray's momentum was the gradual increase in sales of Sony's PlayStation 3 home video-game console, which also works as a Blu-ray player. Sony has sold 10.5 million PS3 machines worldwide since the machine went on sale late 2006.

But PS3 sales have trailed the blockbuster Wii machine from Nintendo Co., and the game machine wasn't widely seen as that critical to the video format battle."
----------
THAT is what we are basing this on. You have to prove this wrong before can even begin to assume we are crazy for thinking the PS3 isn't the main reason for this.

three letters will be the wall for Blu.....DVD----it can upscale to 720 which is what most people with HD tvs are used to seeing