@ joeorc,

Thanks for the constructive response.

I understand that Sony thinks it was wise to include the BR player in the PS3, and MANY gamers are very appreciative of that decision. However, my point is that it's been very hard to justify it from a business perspective, whether you're considering the long-term or the short-term. The attach rate for the PS3 is low, and it's generally accepted that a fairly substantial portion of the PS3 HW sales in the first 2 years were multimedia buffs who wanted a good cheap BR player, but never really had interest in buying the games. If Sony had just used DVD9 and brought the price down to say the $250-300 range, then they would've lured more gamers into PS3 HW purchases early on, and thus profited in later years by much larger software sales. That has historically been the tactic used, in all major consoles except the Wii. Sell the HW at a loss to generate critical mass in the first 2-3 years, and then reap the benefits in years 3-6 (or longer). I think that Sony's IMMENSE success with the PS1 and PS2 caused them to be as arrogant (or more so) than Nintendo was at their peak in the early 90s and thus to assume too much. They presumed that the PS2 generation would simply upgrade to the PS3, without considering the cost as much as they should've, and without developing a sound plan to achieve critical mass. The PS1 and PS2 didn't sell like hotcakes until they received that critical mass, and the exclusive games and AAA titles starting rolling in. By the time that happens, the manufacturing costs have also come down significantly and thus they can start making good profits on the HW sales also, instead of relying on SW.

As for my contention that the success of BR hinged (and still does hinge) on the success of the PS3, I'll defer to the opinions of 'experts' linked below. I would like to clarify that I think the success of the PS3 and BR were dependent on each other. Had the PS3 been the dominant console early on, then BR would've beaten HD-DVD quicker than it did. Had the BR sales taken off like the 'experts' predicted when Toshiba finally dropped out of the HD market, then the PS3 would've taken off accordingly. However, both have had lackluster sales and thus have a shared fate. I'm not sure how YOY decreasing sales proves that the PS3's inclusion of a BR player was a smart move. Everyone who was pro-Sony touted the PS3's imaginary 10-year lifecycle, and claimed it was off to a slow start but after the BR adoption rate increased that the PS3 sales would surge. Yet, here we are about a year and half after BR was declared the HD winner and PS3 sales continue to tumble. It's all about the price and the games, neither of which Sony has delivered on this generation.

http://news.cnet.com/8301-17938_105-10172178-1.html

http://www.washingtontimes.com/news/2008/dec/12/sabataging-the-sony-playstation-three/

Doesn't surprise me. PS3 sold as a Dreamcast in US after 24 months.

DC sold around 6 mil in 2 years that it was on the market in US.

The system costs way too much... Even when the price is lowered, PS3 wont sell as it would have had it come out with a 299 price model. The "next gen" gaming is not really that next gen anymore.

@moondeep

you stated this:

"If Sony had just used DVD9 and brought the price down to say the $250-300 range, then they would've lured more gamers into PS3 HW purchases early on, and thus profited in later years by much larger software sales. That has historically been the tactic used, in all major consoles except the Wii."

that's the problem i have with the View THE COST INCREASE WAS DUE TO "BLU-RAY"

i can tell you it was not.l.think about this for a sec.

The Cell processor was just put onto the market in 2006

vs'

Blu-Ray which was already on the market since 2003

which do you think is more expensive..?

as for being able to bring the PS3 down to the cost near to the Wii or the Xbox360 i pretty much doubt it do to the cost of component's that Sony USED vs' THE component's used by Nintendo and Microsoft ..for instance just look at the HEAT sink's in the 3 machines

the PS3 had the largest, heat sink and Fan out of all 3 machines . to this day it stll does. like i said it's the overall cost of the machine vs just parts if anything the Blu-ray drive would of been the one component that Sony was making a profit on the ps3 per optical drive installed, just the cost of the Cell, HEAT SINK, FAN pretty much killed that profit. at least for the time being.

as for your sources though entertsining, read...

are far from being expert's on it due to the fact that Sony has been investing into Blu-ray since 1997 the new's media act's like its something so new that Sony has taken deep cuts in its profit over Blu-Ray instead of the real culprit being the Cell processor not Blu-Ray. its just the fact unlike Blu-ray The Cell processor is pretty much New and it would and did increast the COST of the PS3 to a high cost than people would have liked.

when the PS2 was first released it too was considered too expensive by many it contained an expensive Bus, multiple processor's and a expensive DVD optical drive. do you think the expensive DVD optical drive was more expensive than the Rambus bus, and multiple processor chip's  in the ps2?

the PS3 without Blu-Ray would have cost near to or at the cost it was when it released. the fact they had Blu-Ray into the PS3 served multiple purposes

1) it gave developer's more room , it gave a scratch resistance to the disc. made the game harder to pirate, an lowered the cost permultiple disc package that was needed

example: a single layer 25 GB disc is cheaper to manuf. and produce than a single DL-DVD9, now a DL-BR 50 GB disc was more expensive than a DL-DVD9 but if your game only need's les than 25 GB it would be cheaper than if your game needed more than (1) DL-DVD9 Even if the DL-BR 50 GB disc would still be cheaper than multiple DL-DVD9's.

from Some consumer's the standpoint it make's no real advantage to use Blu-Ray over DVD when Blu-Ray was released, and it created the price increase to the PS3 , but that does not mean the advantage's were not there or worth it. like i said it just depends on your OPINION on the matter. from a industry perspective it made perfect sense for Sony to go that route because they are after all a hardware company they invested into Blu-Ray for so many year's before the PS3 was even released that it would have been a waste for them not to use it. I think many are just over looking the investment vs' what seem's is too new and not needed argument, when Sony was looking at INVESTMENT put into vs' what they could loose out if they don't use it.

Sony being one of the Largest OEM's for Blu-Ray optical drive manuf. could make money on other companies buying their optical drives, or Diode's for their optical drives.

so the more they can ramp up the greater they can lower their cost. by putting the Blu-Ray drive into the PS3 thay already ramp up their production, and reduce their cost's in the long run. So in a sense Sony did look at it from a perspective of LONG TERM than Short term. did their market share suffer.." for the playstation product line" yes, was it a good choice for their company as a whole..? prob. not due to the fact that EVEN now being in last place with a QUOTE: 3 way race.. four if you count PC..there is only 4 runner's in the "cosnsole market" being last is expected when your the most expensive system among the 3...if anyone think's Sony would not have known they were going to be the least sold system among the 3....come on...PR speak aside ..they are going to do that no matter what company to prop up their position.

it's common sense in the market the most expensive would not have the most sale's.

This can be misleading.... The PS3 has been priced at $599, $499, and now at $399. Despite these prices the PS3 is still selling good considering the problems in the economy these days. I would like to see the Xbox and Gamecube perform like the PS3 with the same PS3 prices during this economy.

joeorc,

VERY well thought response. How about this... I'll give you that the BR didn't add as much cost to the PS3 as other pricey components. However, the bottom line is still that Sony designed an extremely pricey system that was launched a huge price disadvantage that it hasn't been able to overcome. That being said, I would like to reiterate that the games haven't been there either. Sony lost most of its exclusives this generation, and that's hurt as much as the price for some core gamers.

FonzGemini,

Let me understand your point. You're acknowledging that the PS3 has low sales and is very pricey, but then using the fact that it's very pricey to justify the low sales, and then extrapilating that the GCN and Xbox would've sold much worse with the PS3's current price? I think it's common knowledge that cheaper systems sell better. Why do you think Nintendo has always priced their home system at $199.99 (before the Wii) at launch? Why do you think Nintendo original B&W gameboy dominated the handheld market for a decade despite being entirely inferior to the competition (such as the color Lynx and GG). It was price, followed by games. Sony doesn't have the low price, and they have comparable games to a cheaper competitor (X360) with fewer exclusives than last generation.

I wish people would stop trying to justify the high PS3 price and simply acknowledge that it was a bad business decision if they were hoping to be #1 this generation like Sony was for the past two generations. If their goal was to be #3 and have great hardware, then I suppose you can call it a win. Who truly believes Sony's goal was to be anything OTHER than #1 in sales though?! C'mon.... call a duck a duck and let's get on with it :)

Not really,  because the "Aligned launches" skew things... since some systems like the PS3 had much closer world wide release dates then others.

The specs weren't finished till 2004.  The polymer coating wasn't developed till 2005. The very first Bluray players hit the market in June 2006.

Sorry, but you are completely wrong about the Bluray.

What do you mean by that? They are sucessful over there or they make the laws over
their?

O'L BROTHER..

you do know that even DVD's spec's are not finished..why because they never get finished because they are updateing them every year..that's the case with all optical FORMAT'S...that coating had nothing what so ever about when the Blu-Ray format was released..YES the Blu-Ray format used a hard cart to protect the disc's from being scratched, but that does not take away the very fact that the Blu-Ray format was released back in 2003..the first player was released in 2006 is right..So what the first Blu-Ray recorder was released back in 2003..

and no i am not completely wrong about Blu-Ray

Ok, so it sold slowly during the first 31 months, big deal.  Seeing that it is the highest of the 4 after 43 months pretty much makes this thread pointless. 

Also, I don't see how it is "emphasising a need for a price cut" (even though they could use one if they get costs down) when all this took place during the first 31 weeks.  After that it started picking up steam and bam, 1 year later it was ahead of what it wasn't 12 months earlier.