I think the problem was arrogance at first. I believe Sony & Ken "we don't need exclusives" Kutaragi thought the PS3 would just sell itself based on the name, and that anyone who bought a PS2 was automatically going to buy a PS3. When that didn't happen, mainly due to price, Sony knew they had to change stratagies (bring in Kaz Hirai/price cut/redesign).
Sony seems to be on a good roll now & I hope it continues.
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