So it pretty much took them a little more than three years to make a profit on the console? Maybe I'm naive, but it doesn't sound very smart to base your profits on something that takes three years for it to finally sell, especially when your basing it on a technology that was new at the time of launch (in Sony's case, Blu-ray). I mean, in this case Sony lucked out and Blu-Ray is now cheaper, but that's still very risky. hopefully Sony learns it's lesson next generation.

@ Jonathan: Don't forget that they took the same risk with DVD in the last generation and had it pay off tremendously, though. I also assume that, like its sibling PS2, if the PS3 holds out for 10+ years, updating and shrinking its die size accordingly, it could be immensely lucrative in the long run.

What concerns me more, though, is Sony's push for 3D. Yeah, it looks cool, but the price of adoption is so high in this economy, where people also just upgraded to HDTV recently.

@ Jerry: I disagree with your comment that companies are actively trying to make Blu-ray obsolete. Rather, I think they are just creating new technology to be ready for the future (the blue laser project, which spawned Blu-ray and HD DVD actually started in 2003, in DVD's prime). As far as optical media goes, however, I think Blu-ray will be the de facto gold standard for movies, since display resolutions higher than 1080p aren't that meaningful on TV screens, which are relatively small. We'll probably move on for games and data, but I think we're pretty set for movies until Hollywood decides that it's time to have us "double-dip" our movie collections with some newer media.