Yeah, but isn't that extra value you get with Blu-Ray offset current relative lack of games compared to the 360?

Hardware and software on the PS3 are awesome.
No need to change anything.

They should have need to advertise more on the multimedia center + internet side of it.
People thought "What? 600 bucks for a gaming system? No way"

But it's A LOT more than a gaming system.
It's a very good multimedia center, with UPnP capabilities, a very good user interface and a lot of nice features such as ripping CDs and retriving the CDDB info through the web, and such as the photo gallery which is really cool to use and watch.
It will also soon be some kind of Tivo when the PlayTV will be released, it's already a VOD system in the US...
And so on...

Sony really should advertise more on this.

My 2cts.

I'n game xmb from the start. Good quality software emulation if possible. The PS3 is a beast! Love live krazy ken!

Get another Gitaroo Man game in the works!

I'd made all that was possible to launch it WW, benefitting from one more Xmas also in "Others".
And all it was possible, even partially funding a plant to have exclusive supplies, to avoid blue laser shortages right during the launch hype, that cost Sony being forced to partial launch and at least 3 million missed sales at launch time, with them Sony could start effectively chasing MS before, and getting earlier economies of scale, doing before the first price cut, just these two things could let PS3 reach XB360 this Xmas.
And I'd have chosen a version of Cell with one more PPE and one less SPE, making it easier to use more of its processing power since the beginning.
BD is OK, it costed a lot, but dealt a savage blow to MS' ambition to expand in the movie market.
About BC, I'm undecided, models with or without it both sell well, although not in the same measure across the world. Perhaps the right thing should be to offer it optional at cost price, avoiding further losses, but also avoiding making BC models unappealing.

Ah, I agree with Zen that PS3 is quite ugly, it looks a lot like a Tefal Grill, I'd have chosen a different design.

Edit:

@Sqrl: right, I almost forgot memory, at least 512MB main RAM, it was already cheap enough in 2006.

It depends on who I am making it for.

If I'm making it for Sqrl the gamer then I would drop things like BR and go with a different architecture altogether. Make the focus entirely games and gaming and make my system the most inviting I possibly can for developers.

If I'm making it for Sqrl the CEO and shareholder of Sony then I keep BR and make some modifications to the cell architecture to help lessen the learning curve for devs and probably double the memory.

I would have made sure it could out perform the XBOX360, which had already been on the market over a year, which it can't. Hands down. that is sad.

One of Sony's biggest failures is never learning to put a sufficient amount of Damn RAM in the box. I would have changed that.

hmm ...

Hardware changes:
1) 512mb of video RAM - 256mb CPU RAM...
2) Either put R&D into cheaper BD drive OR used a 16x DVD drive.
3) launched with only the 60gb.
4) Quicker changing to 65nm / 45nm CPU and GPU
5) slightly modified RSX which can emulate the PS2 GPU. (provided its cheaper than a RSX + GS)

Advertising changes:
1) Less artistic ads -- more game oriented ads or 'wow factor' ads.

Software changes:
1) Had a better line-up of high profile 1st party games for the systems first year (eg. PS3 version of GoW2)
2) Got PSN cards out a lot earlier - offered the option between viewing 'PSN points cost' or '$ cost' for PSN content.
3) Focused on adding wanted features such as in-game music and in-game messaging faster --> with OS ram footprint reduction in second place.
4) Offered a steady supply of PS1 games on PSN --> using first party games if third parties didn't want to support PSN.
5) Offered the video store sooner -- and world-wide. SONY pictures, Columbia pictures, MGM titles would support the service at a minimum.
6) Offered a music download serivce -- either a SONY one OR iTunes ... (provided Apple payed royalties for content bought over PSN)

Finally - price changes -> limited 120gb 'launch PS3's. required pre-order, costs $599 - $699 (depending on manufacture cost). Launches November 4th.
-> The normal 60gb model launches November 17th @ $449 - $499.

** retailers would be banned from offering pre-orders on 60gb PS3's until November 6th -- to encourage early adopters to get the 120gb model (which would include 120gb PS3 + DVD full of PS3 game trailers + game(like Wii sports) )

i would have kept the 60gb. tried to get some Japanese support and American support from the beginning. some newer updates that have come out should be in the PS3 from the beginning. try to stop delays and add more games at the beginning.

2.4 features 8 months earlier, HOME released a few months back, advertised more games.

1)I would have made a better advertising campaign, they adverts sucked and were totally pointless and shite. they hardly showed anything game or media related :S

2) I would have tried not fob off so many people.

3) I would have released a ps2 emulator rather then the emotion engine chip on every ps3

4) i would have launched the product without delay and with a better line up.

5) released some of the big name ps2 games on HD format; GoW2, SoTC, Killzone etc

6) Would have marketed the product as a 3 in one. Media centre, Wii and 360 combo!