http://www.niwifi.net/2007/04/03/ps3-sales-plummet-82-uk/

Do I pay rent or buy a PS3 or buy the other cheaper systems out there?

XBox for the win.

Wii will be a household item like a toaster or a VCR. XBox will win the console wars over PS3.

The problem is that it's not better than the XBox 360.

The cell processor was a serious gamble which I doubt will pay off.  Sure, it's a powerful processor but that's only piece of the equation and Sony tends to cripple their systems with other bad decisions.

I also think Blue Ray overall hurts the PS3 but it has helped the adoption of the format.

It wasn't better last time around either, but it won with a resounding WHUMP.

The PS2 also had a proprietary processor that cost millions, if not billions to develop. PS2's didn't cost an arm and a leg, though, and they launched before Microsoft.

PS2 was one of the earliest DVD players, so that decision remains largely the same.

Their major problems his go around were:

- launched MUCH later than MSFT
- way too expensive
- no initial online offering

"The PS2 also had a proprietary processor that cost millions, if not billions to develop."

...and they also a crippled architecture with the PS2.  But, as you said, they had much more going for it other areas:

- It came out way before the XBox and was superior to what was available at the time.
- Was the first backwards compatible console so they had the success of the PS1 to run with.
- DVD playing.

"PS2 was one of the earliest DVD players, so that decision remains largely the same."

The difference being that the market for DVD was hot.  I don't think the market for next-generation DVD's is anywhere near as hot.  I have an HDTV and I'm perfectly happy with regular DVDs.  Also, they aren't pushing a standard -- they are pushing another proprietary format.  Sony has more of those (mostly failed) of any company. 

"Their major problems his go around were:"

Lets not forget the complete lack of good exclusive games.  That's not a problem if you are first console out, but it really hurts if you are competing against an established console.  Microsoft bought game companies like crazy to get development for the original XBox.

Last generation, companies developed for the PS2 and ported to the XBox.  This generation they are developing for the 360 and porting to the PS3.  That gives a big advantage to Microsoft -- the same advantage that Sony had  the last time around.

I agree on all those points. Sony managed to lose first mover advantage & the all important "has the largest/most diverse library of games."

Last go around XBox was known as "the first person shooter console" with a lack of RPGs, action games, etc. Now they're getting Oblivion, Assassin's Creed and others first.

They're also getting - and this completely blows me away - the quirky Japanese title Idol Master. Why would a Japanese game making company that makes a very popular Japanese arcade game port it to the least popular console in Japan?
http://www.gametrailers.com/gamepage.php?id=3275