Yes it is but Sony had the format wars to fight so the PS3 had to pay the price to deliver bluray for Sony electronics. They've won that, got the price down at last. I expect Sony to give SCEI a free rein from now on as a thankyou gesture.

@totalcluedo

All true but it was a hell of a price to pay and serious losses to take and surely Sony didn't expect that.
Even if they did not to that degree.

Dude, I agree with and support both of your damn posts in this thread.  Testify!!

I disagree....Blu-ray is enabling Sony to be the leader in moving the TV/Movie market forward  via Sony's BD and 3d initiatives.  Sony knows that being a leader sometimes means that you have to bite the bullet.   

I knew that Sony realized that a $600 video game console, wouldnt sell well at all.  But they also had plans from the begining to find ways to make the PS3 cheaper, and I was reading back in 2007 that the PS3 would eventually cost just $300 to make.  Well, by late 2010 when the 32nm PS3's come out, we'll see Sony beating that forecast, only 5 years after the PS3 came out.  Not bad for something that originally cost Sony $800 something dollars to put out.

Sony had >75% share of the video game market.  You are suggesting that they willingly decided to give up thier strangle hold on that market to get the advantage in another sector?

I would completely disagree with that sorry.  They did not expect to drop to 25% of the market by this move or they never would've done it.

Sony will decide to do whatever it wants to make Sony as a whole as wealthy as possible that's finance theory and if adding a costly component to the PS3 will give success w/ Blu-ray, and help w/ the 3D initiative even while limiting the PS3 for 3 years or so, big deal right?  Also, keep in mind that they had much better competition this round anyway with the Wii and 360 so try to look at the whole picture.  Also, keep in mind that no division of Sony's is worth more than Sony as a whole.  Sony's performance as a whole over the long term is the only thing that matters to stockholders, so that is really the only thing that matters. 

Sorry dude, in my BBA and MBA, they didn't teach the finance theory that stated, lose 50% guaranteed market share with the hope that you might make money somewhere else.

Now, it's cool that you believe what you believe, but don't quote "finance theory" as if that is some golden pass.  Unless you are calling out a specific theory, and then please, share that.

Sony's Playstation division was long the bread winner of the Sony family and helped support thier failing divisions in times of need, that's pretty evident from previous annual reports.

Now I agree they wanted another arm of thier company to perform well and having a stake in the format winner is a boon for them.  I simply do not agree that they ever thought they would lose so much market share in the process.

I thought that we were talking about finance theory, not marketshare? If you want to talk about finance theory you can see that Sony is on the verge of making a profit. If you want to talk about market share, you can always talk about how the PS3 is gobbling the 360s up like a fresh pizza and i'm sure that the Blu-ray drive will have a big part in keeping the PS3's sales going for longer than the 360s.

Things did not go as smooth as possible for PS3 thanks to competition. Microsoft rushed out a broken system to counter the games side of PS3, and Toshiba rushed out a half ass attempt against the movie side. Sony just did what they had to, and that was release PS3 at a high price, and eat cost like crazzy. I think in a perfect world Sony would have liked more time with the PS2. They were kicking ass, and could have waited to launch for another 2 years, but competition forced there hand.

I think PS3 in 2008 was were Sony would have liked to started, but in the two extra years on the market PS3 has changed the entertaiment landscape. So, is now a better time for the PS3 launch? Yes. However, had Sony not responded to the competition in 2006, PS3 would be in a much worse position right now, and so would the rest of the electronics industry.