No, they weren't. H.264 hardware decoders were not cheap in 2005/2006, but they we available, and they were used in every blu-ray and HD DVD player, even the HD A1 with it's ridiculously overpowered pentium 4. I don't think the P4 is capable of realtime software decoding of two simultaneous 1080p H.264 streams, as required by the blu-ray spec. In the A1 they did the secondary stream decode with it, but secondary streams in HD DVD were only SD.I really don't think it was back in 2006. That's why Bluray players back in 2006 were $1000+, they were basically PCs with Pentium 4s.
We're likely to see hardware H.264 and software H.265 decoding with the PS4. My question is did they ever bother including hardware H.264 decoding in any of the PS3 revisions? I would think that with all of the media content the system does now and how cheap fixed function silicon is, not sticking it in would be a real waste.
Edit to clarify: I meant standalone player. The PS3 and 360 did software decoding, which everyone knows, but if I don't state it, someone will...
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