Blu Ray is one of the reasons, but not the sole reason. Sony f-uped this generation in so many ways. BR wasn't ready for mass adoption yet; the price of the PS3 was too high such that there are many people who want it but won't shell out the cash until the price goes way down; the marketing was pompous; lack of high profile games relative to their competition; huge delays with what was supposedly their real first system seller (ie. MGS4); etc.
They can still end up in second place worldwide, but this generation is a wash for them. I say it's important to finish off this generation strong simply so they can push themselves forward into the next one.














