Sony's Conference The Day After
I believe the best way to describe the reaction to yesterday's Sony Press Conference would be underwhelmed. The Guardian Gamesblog always says it well: "Jetlag means I'm not entirely sure what day it is, but what was Sony's excuse? Today's conference was a muddled mess that essentially confirmed widespread rumours of a problematic PS3 launch build-up. The games shown were of varying quality, with perhaps only Heavenly Sword really showing the undoubted potential of the PS3 ... Sadly, on today's evidence, 360 owners shouldn't worry about missing out, as the PS3's visuals seem broadly similar to their machine. Impressive then, but not the leap we had truly hoped for." Chris Kohler nails the real problem with the lower-priced model: "This just made Microsoft's $299 Core Pack look like a genius idea. At least it's possible to upgrade an Xbox Core. I don't know what kind of arcane magick will have to be executed to give a crippled PS3 actual functionality."
It's still got a bluray drive in the cheap version, it just doesn't have HDMI+HDCP, so you can't watch (some of) your bluray discs in full resolution.
If I have been able to see further than others, it is because I bought a pair of binoculars.
From what I've read about the press conference (and from the various opinion pieces I've read on it), it seems that Sony has grown overconfident--and with over 65% market share, can you blame them?
I'm not so sure the problem is overconfidence. I think the fundamental problem is that blue-ray HD-DVD drive.
I understand Sony is trying to make blue-ray drives the defacto next generation HD-DVD standard, but the problem is that the 1st generation drives are so expensive ($400 by one estimate I read) that it's pushing the overall cost of the system out of the market. Even at $500 Sony is priced well above Microsoft and Nintendo and still must be losing big money on each system.
If they swallowed their pride and released a system with a standard DVD drive and dropped the price to $400, they could probably sell as many systems as they can make. At $500 (and $600 for the good one), I think they're going to have problems.
Sony promised HDMI, a digital media reader, wifi, etc. They promised it. And they kept mum on pricing.
It went from "we'll have everything and 0wnz" to "we'll sell you xb360-like graphics with a wii-like controller for $200 more".