Rumor has it that the Blu-Ray is a core reason why PS3 is running late – you don’t want to run half-assed into a major tech war against a heavily funded opponent. They aren’t apologetic – they are, in fact, trying to spin it as a major boon to developers.

There’s this sort of misunderstanding that the Blu-ray disc player for movies is somehow burdening the console with unnecessary cost. That is completely not true. We put our Blu-ray disc functionality in the console purely from a game design point of view. Once we had that storage capacity on Blu-ray disc, adding the movie playback functionality was extremely cost-effective, [the cost] is actually non-existent.

Secret about developers – that extra storage space scares the hell out of us. It costs money and time to make all the extra art it takes to fill out the disc. Costs to make the games keep going up, the number of copies we sell don’t keep pace. It ends up being an industry where only the blockbuster hits can succeed, which drives away risk and innovation. See Raph’s AGC talk for more on the sound of inevitability.

Compare this to Nintendo’s mindset (Found via Kotaku):

The article goes on to say that the typical Wii game will cost about $7 million to develop, or about half what Xbox 360 and PS3 games cost to develop. And with the cheap price tag comes greater developer interest, which leads to more games and, potentially a larger market share, which in turn leads to more developer interest.

7 mil is a perfectly reasonable cost to make a game. Why is the Wii so cheap to make for? Because, well, the console’s rendering hardware isn’t that much more advanced than a GameCube’s. Many programmers mock the platform by calling it the ‘Gamecube 1.5′, but building on established tech is easier, and the inability to render ludicrously detailed textures also obviates the need to actually create 20 gameplay hours worth of ludicrously detailed textures.

Many people think that the PS3 is utterly doomed – I don’t know if I buy that. They have had market dominance for so long that it’s hard to imagine them not putting out a respectable showing, even in decline. I do know that they seem to be making every possible mistake on the way to market, and I do predict doom and gloom for the inevitable PS4 if they don’t actually learn something from this go-around.