Actually diamonds are quite common and their value comes from 'percieved value' so probably the best case for it would be the WIi.

@Galaki: No thats never the complaint when its 'too big'.

Perceived value could also be hyped to raise its price. Diamond is an excellent example at that.

Including Blu-ray is one of the major reason Sony will end this generation in third place

"We had no choice"

What a ridiculous comment. Of course they had a choice. They just felt that Blu Ray was a better choice.

Also I can see that some way of differentiating the machine from the Xbox 360 was required.
If they had produced the PS3 with a DVD drive then it would essentially been an Xbox clone with a dodgy memory configuration.

HD DVD would have been a much better choice for Sony

The problem is this, over 95% of games on the PS3 have shown no need for more disc space than a standard dual layer DVD and the other 5% of games could make minor adjustments to fit on one DVD or (at worst) could be released on 2 DVDs. When you compare this with the shift to DVD it becomes difficult to justify the claim that Blu-Ray was "needed" ... After all, at the end of the Playstation's life a large portion of games were being released on multiple CDs, most other games were making major adjustments to be released on only one CD, and the following generation pushed the ammount of data in most games far beyond what could be put on a single CD.

The thing that probably (should) make Sony question the "need" for Blu-Ray is the success of the Wii ... Roughly 50% of gamers are generally happy with the visual quality that is presented by the Wii, and some (potentially a large portion) of the people who bought HD consoles would be completely happy with their visuals if they produced Wii-Like graphics at High definition resolutions. Now, if only a (potentially small) minority of people care about producing the detailed models and textures which take up a lot of the space on disc, and only a (potentially small) minority of those people care about the slight difference in quality between those being compressed on DVD or uncompressed on a Blu-Ray disc, what is the value of the Blu-Ray format and how needed was it?

First things first dude, I don't follow the devil...I AM THE DEVIL!

Secondly, Sony has been pushing multimedia for quite some time, so in that respect the PS3 helped sell the format. In a sense, yes PS3's flew off shelves, but not for gamming. Given M$ and their their practices during the console war I don't think you can say anything about Sony's practices. Perhaps if Toshiba was smart they would have pushed the HD-DVD format on M$ and this might be a different discussion.

I like that PS3 has Blu-ray. But it has cost the PS3 dearly in terms of market share. In terms of quality of product and gaming you are a one eyed loyalists if you think PS3 is doing badly.

As for failing this generation: it all depends on your definition of failure. And the only definition of failure that matters for Sony is Sony's definition. If you define failure for PS3 as giving away the massive lead they had with PS2 then yes PS3 has failed to date and the chance of redemption in the second half of the generation is slim indeed. But I can't help but think that Sony went into this generation knowing their lead would be severely cut; they might be arrogant, but they aren't stupid. I'm sure at launch they expected to be (slightly) ahead of the 360 by now. And without doubt they expected the Wii to be behind them. Honestly was anyone expecting PS3 to overwhelm the competition with what they brought to market? The day I heard PS3 was launching a year later than 360 I knew Sony was giving away most of PS2's advantage, then when the price was announced I knew PS3 was going to have an uphill battle. So on the day of launch my expectations were no where near the PS2 level.

Sony will only have failed (according to Sony) if 2 things happen: They can't bring a PS4 to market because there is no money in the SCE coffers to make one, and the PS3 falls well short of the 10-year strategy. The former represents total failure, the latter would be a qualified failure, and would barely rate a mention if a PS4 comes out and is successful.

The PS3 in relation to the 360 right now is a miscalculation, but not abject failure. And no one knows what the situation would be if extrinsic factors hadn't conspired to make people much more price conscious. The 360 makes the PS3 look like it has failed to live up to its full potential. Sony was expecting the 360 to be a strong competitor the day they decided not to launch their product at the same time as the 360. They just didn't think it would be quite this strong. And the world went into an economic recession.

The PS3 in relation to the Wii is an unmitigated disaster, a complete capitulation. Sony were blind sided by Nintendo. But they weren't the only one. Microsoft never saw the Wii coming, and neither did I. Sony had more to lose and so look the poorer for it, but if 360 fans are honest they will admit Nintendo embarrassed Microsoft a lot too.

If PS3 ends the generation with at least 25% market share that will be a fair result. Less than 20% market share would be fail result. Between 20 and 25% is a bad outcome but not quite failure.

I don't think Sony had much choice in using Blu-ray, though I think the reasons for having next to no choice are different to what is quoted in the OP.

So this is the present reality of PS3 apologetics? 'Sony knew they weren't going to be first'. Seriously its totally beyond reality to think that they would go down a path to deliberately give up a commanding lead and billions of dollars of profit for a format which will never earn as much revenue as DVD and of which they only hold less than a quarter of the patents. They have likely lost more money with the PS3 than they will ever make back BR + PS3 combined.

So basically- the $400 price tag and the sales pitfalls that have befallen sony stem from MGS4? :o