Personally, I think Sony could have crushed MS with a much simpler plan this time around. Release in 2005; remove the BluRay drive and go for "par" knowing DEVELOPERS will carry your flag; remove the HDD as standard (huge money pit and standard in some ways due to BluRay) but make it a requirement for Online Play; offer Memory Cards and other accessories.
This is exactly what I've been saying for a while now. A PS3 released last year with a DVD drive and priced similar to the 360 would wipe the floor with the 360 on Sony's name again. If anything, Sony gave MS life.
Sony is banking on BluRay, this much is clear. There are issues there though. Firstly, the execution of BR to date has been poor. There seems to be no common ground amongst the CE's. They all do their own thing in terms of player specs. Then the specs themselves are complicated with a lot of stuff "optional" and the some of it becoming mandatory in June 2007 but only for players that come after that date. On the other side, they're competing directly with HD DVD which is continuing to gain momentum and really, there won't be a quick end to this "war."
Putting all that aside, the general public simply does not care about next gen DVD's. They really don't. You hear all sorts of crap about HDTV sales and how well HDTV's are selling. Fact is, if you go buy a TV today, you don't have much of a choice! You're coming home with a "HDTV." Then people bring these things home and never sign up for HD. To them, widescreen IS HD and the fact that their Best Boy sales rep sold them a "upconverting HD player" they're convinced they're already watching their movie in HD. And really, why not? Their TV displays 720p/1080i/1080p doesn't it? So it must be HD!
They don't know or care about the technicalities on how and why it's not. Their TV and sales rep told them it's HD so it must be and really why should they spend so much more for not a lot of benefit? Hi Def is simply resolution + audio. The audio you'll really only benefit from if you have a nice high end home theater system. How many people you know have a 2k-3k+ 5.1 system? So really, you're left with the resolution benefit with is at best 10-15% better than a good upscaling player and on a calibrated display, so unless you're an enthusiast (like me and others) you're not gonna be jumping for joy.
The only way for BR to be successful is to not give the consumers a choice. The CE's need to cycle out their SD player with similarly priced BR players (like what we see with HDTV's now) and the studio's start doing day and date on all their releases and eventually phase out DVD. Are the CE's and studios will to make such a strong commitment? not anytime soon.
