What price is the Sony PlayStation 3?

Last week at CES, Pioneer unveiled a standalone Blu-Ray player for $1800. Sony's Playstation 3 is speced to include a Blu-Ray drive, which has analysts believing the Sony PS3 could launch with a $500 price tag. When it comes to pricing Sony products, analysts have been wrong before -- such as predicting the PSP would be $500, when it actually released at $349. The war of the consoles, this time played out by Microsoft vs. Sony, is turning into an interesting one -- the field to be won is not in hardware, but in software.
What a short sense of history we have. DVD players initially were expensive -- about $1800 for the top of the line Sony units -- in time as DVDs were adopted as the next-generation format (there was a brief format war between DVD and DivX), the cost of manufacturing players dropped, and now DVD players can be found for less than $100. The Playstation2 when it was released was $50 less than a Xbox, and $50 more than the Nintendo GameCube. It also had the advantage of releasing first and including a DVD player at a time when the cost of a PS2 was equivalent to a standard low end DVD player.
I expect much of history to repeat with Blu-Ray. Xbox 360 does not have a Hi-Def media player bundled in. As people move to HDTV, the desire for HD content increases. I've experienced this myself after watching kwc's HDTV Plasma. When it gets to that res, what used to be acceptable now begins to look rather low-quality, and the search for HDTV content begins. Much of next-gen gaming is aimed at HD content, and consumers will get to the point where I believe given the choice between an HD console without HD-DVD or Blu-Ray (XBOX360) and a HD console with Blu-Ray (PS3), from a hardware standpoint, I believe the consumers will choose the PS3, because it is easier to justify the purchase of 1 thing for a slightly more expensive cost because it is less disposable. If PS3 as a gaming platform flops, you still have a Blu-Ray player. This, is also why I believe Blu-Ray will be the format of choice for high def video content. Even with the possibility of USB ports to hook up additional devices (such as external Blu-Ray or HD-DVD) consumers are likely to notice that it is at an additional cost, and given that they've already done the core plus buying peripherals marketing scheme any further purchase looks like a bad buy. If Xbox360 flops, all you have is the library of bad Xbox games to fall back on.
What it really comes down to, however is the software, and Nintendo is actually best poised to leverage its library of game classics as a major sales point. Playstation 3 seems to be putting it's bet on Blu-Ray, while Microsoft, in their race to be first out the door will be the first to be obsolete. Maybe that won't matter as they sell games, but as far as I can tell, game sales for Xbox360 have been rather weak. Christmas is over, and with the arrival of credit card bills, many consumers who may have thought about a next generation gaming system will probably wait for another system to release before making their decision.