Does Sony want to lose a new format war?

Reuters

One camp, known as HD DVD and championed by Toshiba Corp holds the view that consumers will buy high-definition DVDs and players, but only at the right price.

In keeping with that position, Toshiba at the Consumer Electronics Show in Las Vegas on Wednesday said it would offer the first high-definition players in March, priced at $799 and $499.

Those prices are below what a member of the rival camp, known as Blu-ray and led by Sony Corp., is asking. Blu-ray member Pioneer said it planned to offer a Blu-ray player in May, priced at $1,800.

I know that they are targeting early adopters, and in many ways Blueray is the better format, but that big of a price difference is insane. If Toshiba can keep HD DVD half the price of Blueray for the first few years, I don't see how Sony can win this war. Betamax proved that superior technology doesn't make you bulletproof. Plus, why would anyone buy a $1800 Blueray player when they can get one FREE w/ a $400-$700 (price still unkown) Playstation 3? Does Sony think people are really that stupid (granted, some are). If Blueray fails Sony better hope PS3 rules the world (very likely). It may be the only thing that keeps Blueray alive.