I've done quite a bit of thinking on the subject, because my initial reaction was that Bluray was going to fail. That was day one reaction when I first heard bluray was going into the PS3 and was causing shortages for launch. many people complained about not giving consumers the choice, and useing teh PS3 as a Trojan Horse for Bluray, but i've come to realize that Sony may have had an incredibly cunning strategy, whether intentional or not.

Look at the two possible scenarios: 

Bluray wins - Sony gets pats on the back all around, PS3 is seen as the more "leading edge" console and now even more people will be looking to get it as a bluray player that even lets you play games too.

Bluray loses - Sony is sad, now the butt of even more betamax and laserdisc jokes then before. BUT now in order to pirate a bluray disc to create illegal copies, pirates don't just need codecs and media formats, they need to go out and find a bluray player AND writer, which by a year down the road may have been completely discontinued from production by all but Sony. Sony now has a proprietary format for their games which become downright expensive and inconvenient to steal.

Either way, Sony would have benefited from the new format.

Thoughts? 

Blu-ray won because of the PS3, and now Blu-ray will help the PS3 sell. Ironic, but good gameplan by Sony. It just needed a price-drop. 599 us dollars was a bit much, no matter how rich you are.

Sony took a huge risk on Blu Ray. They have rolled out a few formats that flopped like John Kerry, and have a history of creating formats that don't really catch fire - UMDs, ATRAC, Minidisc, BetaMax. They have more misses than hits. That said, they really, really, really pushed Blu Ray at the expense of their PS brand. They offered the features that studios wanted, and a few studios got paid to side with them. After losing to other formats, they learned from their mistakes and eeked out a victory.

But ... is it really a victory? J6P isn't interested in a $400 Blu Ray player that plays games. It won't be a real victory until Blu Ray breaks the $199 barrier. Then, folks may be interested. Right now, with few folks that have the proper equipment to view Blu Ray the way it was supposed to be viewed, it really makes no sense for folks to buy one now.

In the end, confusion will continue to drive the PS3 sales. Great job, Sony ... 

Nope. Though the PS3 helped Blu-Ray win, it was at the cost of Sony's console dominance, which has been far more beneficial to them in the past than the royalties from Blu-Ray are likely to be. There isn't a chance at all that the savings made from less pirated games would outweigh the fact that the PS3 will sell at least 50 million consoles less than it's predecessor.

In the end this was always going to be lose-lose or lose-win for Sony. It ended up being lose-win, but it remains to be seen if the win outweighs the loss. Given Blu-Ray may have won without the PS3, I would say that the trojan horsing of the PS3 was a bad idea. They lost billions on the console, won't make the kind of profits PS2 did, and spent hundreds of millions subsidizing players and paying off studios like Warner.

Add to this the fact that Blu-Ray will never sell like DVD did, as it is already facing competition from downloads and televisions that cannot display it's benefits, and you have to wonder whether Sony can produce the future earnings from Blu-Ray that they have lost from the gaming devision.

DVD isn't enough for the PS3 for the long run anyhow (games). So a Blu-Ray drive was the obvious choice (more storage than HD DVD, no disc scratching and Sony has a finger in the pie regarding its development).

Madskillz

For someone who hates PS3 (and Sony) so much, you show so little intelligence.  I'm going to put this in caps lock, since I've said this two you on two separate occasions.  SONY IS NOT THE SOLE CREATOR OF BLU-RAY.  THERE WERE NINE COMPANIES THAT FOUNDED IT, AND OVER 250 COMPANIES IN THE BDA.  THEY DIDN'T ROLL OUT THIS FORMAT SOLELY, THERE WERE OTHER COMPANIES ALSO. 

But you won't listen or care.  Why should you?  You picked the other horse to win, and since it's slowly (but surely) losing it's marketshare to the PS3, what can you do except accept it, but you're not doing that.  You're looking more and more delusional as the days go on.

Your right and the US weren't the only one's in the war with Iraq. (I think you get my point)

Adoption of Blu-Ray disc is already happening faster than was the case for DVD. I am sure HD war clarity will help this further. What modern TVs cannot show the benefits of Blu-Ray disc?

Phillip Swann, president and CEO of TVPrediction.com:

"I disagree that downloads are becoming more practical -- that's just propaganda from the tech world. The average American does not have the patience or technical skill to use a download service at home, such as Apple TV, Vudu or even XBox 360's service. Plus, download times are usually too long (sometimes hours for a high-def movie) and the picture quality is sub-par to what you see on a Blu-ray or HD DVD disc." 

honestly, looking back with a totally rational view, I really cannot see how bluray "cost" PS3 the lead.
What cost them the lead was Wii's physical innovation that overshadowed PS3's format innovation(and making their motion control innovation look incredibly badly thought out), and the problem of facing a yearlong established 360 that was viewed as their equivalent as well as having to compete with the PS2 as a far cheaper alternative to a massively wider library of games. High price ensured it's continual dead last position for the past year.
However Microsoft apparently didn't stretch properly before setting off and has possibly sprained itself on RRoD, so between the support of Bluray and the lowered price, PS3 may pull up level with 360.

Either way, whether they do pull back up to 2nd or continue trailing, I really don't see how bluray cost them any of that.