This is something I've mulled for a long time. I now decided to post because of a comment by Blue3:

"Why even buy a wii if a PS2 is half the price and has same quality games ? wont there be more people willing to spend $49 on a PS2 when $99 on a wii if its all about price ?"

It was kind of a rhetorical question -- but I think one could actually take it seriously. The answer is: "lots of people probably would buy the PS2 at that price, except the system has been replaced by a superior model from its manufacturers."

Which leads me to an honest question: could Sony have simply stuck with the PS2? It's still outselling the 360 and PS3 month by month, week by week, even though the company that makes it has clearly moved past it and doesn't consider it their main platform anymore. How high above the Xbox360 would the PS2 be if it still recieved Sony's full support?

This is a serious question, I'm not being sarcastic. I'm welcome to any criticisms or comments that anyone has. What would have been so bad about staying with a console with the largest installed base in history, that is still outselling "next-gen" consoles 1.5 years after their generation began? 

I think if Sony had decided to stick with the PS2 just a little longer (an extra year) and launch the PS3 this year, it would've been genius. The costs would've declined on Blu-ray, they'd have plenty for launch, the price could've been lower, the hype would still be high and folks would still be holding out, wondering how much better PS3 would be than Nintendo and Microsoft's consoles.

They could've played their cards better this gen. The PS2 would rival the Wii's sales if Sony was fully supporting it now, I think.

I agree, the PS2 has casual appeal and they decided to replace it with a system that has none, thus leaving the casuals no choice but to switch to the only remaining viable casual system: the Wii. Now they not only are losing their primary PS2 owners to the Wii, but because they were in such a rush with the PS3 they are having trouble killing the PS2 off.

 I don't think you understand. I'm not even suggesting waiting -- I'm suggesting just not making another console, at all. Period. No PS3 for another 5+ years, at least until the next generation.

Suddenly, the PS2 is Sony's console for this generation, they are selling (almost?) as well as the Wii, and they have a 110 million unit lead. Right now, the Wii is doing well because it's such an innovative console, but it's also doing well because Sony messed up so badly. If they still had full support behind the PS2 -- producing their major games for that system, not the PS3, were still advertising the PS2, not the PS3, were encouraging developers to make games for the PS2, not the PS3 -- then these figures would still be higher, and would certainly not be trailing off as they are now. They're trailing off precisely because Sony is intentionally moving their support to their new platform.

Let me state this again for emphasis: Sony is deliberately killing the most succesful console in history. I understand that eventually... that has to happen. I guess. But the Game boy lasted 15+ years in different incarnations. I understand that home/portable markets are different, but I really don't believe that keeping a console for 12+ years instead of 6 is an absurd notion when that console is as monumentally popular as the PS2 has been. 

Should Sony have stuck with the PS2?

 No, I think Sony should launch the PS3 earlier with a lower price, stuck with the PS2 one or two years will hurt a lot more the PS3 launch, the hardcore audience and casual audience will ship towards 360 or Wii because the PS2 cant compete with both at the same time, even with the games and the price simple cant attract more than the "Wii-mote" or the "next-gen" graphics of the 360.

Even worse, having nothing new will kill the PS2 sales again the mighty "Wii-mote", the best case escenario will be this:

PS2 "Great Games"

Wii "Ports of Great Games with Wii-mote"

What would the casual audience choose? Same graphics in both systems, new control scheme on the Wii.

While the market seemed like they demanded the machine as quickly as possible, the company felt they should rush it. While the PS3 has had great positive effects on blu-ray sales, the console sales are lacking because, the machine is a tad expensive yes, lack of titles until the q4, and the market needs to own more hdtvs to actualy enjoy the console like it shuld be. As I said before teh machine is a little ahead of the times but will grow nicely the next two years.

They don't have to choose; most of them already own a PS2. The choice has already been made. Basically what you're asking those people to do is buy another console. But because Sony replaced the PS2, they psychologically feel that they must do so. If sony had not replaced the PS2... who knows? How many of the people who will upgrade over the course of the next 3 years would have simply been happy staying with their Playstation 2, which (in my hypothetical universe) still recieves strong support from Sony and anyone else willing to take advantage of the largest user base in history?  

Once again, the sales show the opposite, lot of people is simple getting the Wii even if they are not many great games, if you put the two in the same market the results will be the same, lots of people will be buying it just for the control, and then you put the ports of the PS2 some great games... more peolpe towards the wii... Because:

Is cheap, not like the PS2, but is cheapper than the 360.

Is taking a lot of ports from the PS2 Great games with that control, everybody want sonmething like that.

IMO the more options available the better, personally I was never that much interested in the PS2, but I very much like the PS3. The PS2 is still available and doing well at a cheaper cost. I bought a more expensive Amiga 2000 in the 80s, while most bought the cheaper Amiga 500. The A2000 with better specs simply suited my personal preferences much better and while still being able to play all those great A500 games.

With regard to Blu-Ray and HD-DVD technology becoming cheaper, this has largely to do with PS3 mass production as well.

The PS3 offers a lot more horsepower and functionality compared to the PS2, so it's natural development will take more effort. Releasing the PS3 a year later would have allowed for a little cheaper launch price, but I think now with the PS3 already in mass production, production costs are actually coming down quicker. Eventually we will probably see a slimline PS3 at a much lower cost, together with system upgrades and a larger games library I think will become interesting to a larger audience.