Here in Norway, counting inflation through the years, the PS 1 and PS3 were equally expensive and the PS2 a little more costly than those two upon release.
Sounds strange perhaps but its true.
That said; yes the PS3 was way too pricy when it came out!

The point is: the starting price was too high. for this market, a price of $299 or lower works better. Sony had a major market share at the start of this generation. When this generation is over, Nitty will have the largest market share. Winning the HD/blue-ray war, means they lost the gaming war for this generation.

How long will blue-ray last vs DL movies to your game console ?

The next generation console should have a burner to make your own movies.

But unlike all the consoles you named even with the 600 price tag it still would have sold more consoles.

@ libellule

I think this is partly intentional on Sony's part (not in terms of quality of the software, but in terms of releasing sequels to highly popular PS2 games early on in the game). The PS3 strategy seems to have been to create a healthy install base (as well as allow the PS2 to continue to sell), but not sell too many units early on as this would have been very costly to Sony.

So instead of having anticipated games like Dragon Quest, Tekken, Gran Theft Auto, Metal Gear Solid, Final Fantasy sequels available within the first year of worldwide release like was the case for the PS2, Sony used the oppertunity to facilitate the introduction of some high quality and successful (million seller) new franchices like Motorstorm, Resistance, Uncharted and Heavenly Sword. And only a handful sequels to less anticipated games which did well on the PS2, but not the best aces they have in hand by far. This gives them time for production costs (hardware losses) to drop and more time for the games which are really crucial and highly anticipated by PS2 fans to be better polished for the new technology.

Even without such sequels early on, the PS2 not being discontinued like is the case with regard to the competition (even still outperforming the 360 worldwide), higher entry pricing, the PS3 was still able to significantly outperform the 360 for a similar time on the market, and this while all major XBox games already saw 360 sequels. The only 360 / PC semi-exclusive XBox game left which sold well and still hasn't received a sequel is Fable! (Counting the multi-platformers, there's still Starwars and GTA left for this year, but that's it for well sold XBox sequels!)

The best sold or best rated PS2 exclusive games are nearly all confirmed to receive PS3 exclusive releases including Gran Turismo, Final Fantasy, Metal Gear Solid, The Getaway, Jak & Daxter, God of War, Twisted Metal, SOCOM, Tekken, etc. Sony has all these aces still in hand, and when they play this hand many PS2 gamers will be pushed to upgrade towards buying a PS3, just like many XBox gamers were pushed to buying a 360 due to nearly all games which performed well on the XBox already seeing 360 sequels.

In addition to the highly anticipated sequels, Sony also has games like White Knight Story, Eight days, Eyedentify, Afrika, LittleBigPlanet, Team Ico project, etc, etc, these also are new promosing yet still unproven efforts, but which may attract new people. Home and PlayTV are also new services to tap new kinds of consumers.

I honestly think for the long run everything will pay off extremely well for Sony, very different strategies as compared to the competitors, but really only Sony was in the right position to make such a strategy work.

Also i don't see the pricing as a mistake. If it launched cheaper they would of likely lost way too much money.

If you find fault with the opening price you should fault it's design. I mean they were losing money at 600.

You're 2 years late on this topic.

Sorry.