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...Don't hold your breath!

I'd bet a lot of money that BluRay is there to stay. Sony won't be taking it out of their system to lower the price of their console.

And here's why:

1. BluRay is Sony's proprietary media format. Many people would probably buy a PS3 not only for gaming, but also for the fact that it's a really cheap BluRay video player (by comparison) and will continue to be for at least the next couple years, before any stand-alone BluRay player drops in price enough to make it a better bargain than a BluRay + Next-gen video game console.

2. Sony, and all the developers for PS3 (1st and 3rd parties), would have to change the way games are made for the system. First of all, Sony would have to develop a new developer toolkit to change the disc reading functions currently in place. Second, developers would have to not only learn a slightly different set of tools, but they would also have to go back and edit code of games that are already released, in order to re-release a copy that would be playable on the current format (the media drive), or they would lose a great deal of their potential market.

3. Sony could stand to lose a lot more money on a non-BluRay, lower-price PS3 than they already do on the current BluRay-capable PS3. Look at it this way: if Sony released a non-BlueRay PS3 for say $499 or even $399, they would probably sell a lot more systems, but (ignoring my second point above) they would probably be making their BluRay model obsolete. Developers would probably not want to develop for the BluRay model, just due to the fact that it wouldn't be in as many homes. So more and more consumers would buy the non-BluRay or even trade in their BluRay model for the other to get the 3rd party games they wanted. As a result of all of this, Sony is not selling the BluRay technology or producing BluRay discs. The whole BluRay market would probably die as a result, and that would hurt Sony more than the PS3 in it's current state ever could.

So to wrap up my rant, the final reason I have for you that Sony will not drop the price of the PS3 is that, put simply, without BluRay the PS3 is just not a PS3. The success of the entire system is riding on that proprietary technology. If they try to change their tactic now, they would only hurt themselves more.

PS3s are expensive. Love it or leave it.

You're probably right...Sony is really counting on BluRay. If it fails, the PS3 fails

I read that Blu Ray has outsold HD DVD for the past couple of months.

More than likely thanks to the PS3. There isn't an affordable player for HD-DVD, and if it wasn't for the PS3 there wouldn't be one for Blu-ray either. But I still don't see why people are flocking to Blu-ray and HD-DVD. There's nothing wrong with regular DVDs. I can live without the clairity of being able to see every pore on an actor's face.

EDIT: regarding greenfrog's post

Got a source? I haven't heard anything about it. But it's good to hear, I mean PS3 is Sony's way of injecting BluRay into the market, so it sounds like (from what you said) that they've been successful at that, so far.

If it wasn't for the PS3, BluRay probably wouldn't really take off.

Exactly. The step up in quality is not nearly enough for me to part ways with my DVD player. The difference is certainly not enough for the current price tag. I'm waiting for 3D hologram technology!

source

Sorry I didn't source this info before, but all you have to do is a Google search on "blu ray sales better?"

This is why people are looking at HD DVD and Blu Ray.

1. They went out and bought an HD tv.
dvd movies are recorded in 480p. if you have an up converting dvd player you can get that to 1080i and some newer ones go to 1080p, but it's still up converting, whereas HD DVD and Blu Ray can record their movies in 1080p from the start.

2. On launch, HD DVD was only $499.99.
this is probably half the price of the original dvd player. with new HD DVD players supporting disc running at 1080p, then if you had the money, why wouldn't you look into it?

3. We're always looking for something better.
personally I hate going to the movie theater, and being subjected to all of those annoying people. if I can sit within my living room and get a literal movie theater experience, I'm gonna do it.

It comes down to money. If you got it, then your much more likely to take the plunge. Honestly though, paying $364.99 for a second generation Toshiba HD-A2 HD-DVD Player is a good deal, and really isn't a plunge at all.

basic dvd information source

toshiba hd dvd price/source