Precisely, the only huge hit to the wallet is in the initial price of the console itself, and that will go down in the long run. Cartridges failed because they were an overly expensive format that was faced with a format that was superior in every way but load times. In this case, Blu-ray IS the superior format, and some companies are already using it to full advantage (a single level in Lair can be up to 4GB).
Sony won't lose this war. I have no doubt that their position will be hurt, but regardless of how many titles have gone multi-platform so far, they still command a good list of triple-A titles that are exclusive and almost guarenteed console sellers. Also, I'd say Microsoft is dreaming if they think they're ever going to win the Japanese market, no matter how many Japanese developers start working on the system. Odds are that Sony will still decimate Microsoft over there, and that's a huge market, both in terms of gamers and developers.






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