Sony went out and then some trying to make the PS3 an all conquering all sing and dancing multi media machine. In it trying to drag in a bigger audience, an audience that previously wouldn't necessaily play games but have the means to buy other gadgets and media machines for the house. They even style the machine like it too, it doesn't look like a regular console, it looks like nothing else.
The problem comes I think is in about a year's time, HD DVD player or Blueray will become a much cheaper media to produce, and the price for an independent player will come down.
You don't have to look far, just the PS2, it has a DVD player, I remember when people were going on about how it has a DVD player and how it saves them money instead of buying a stand alone machine. The concept worked for about 6 months, it wasn't long before Toshiba, Panasonic (not just budget brands) had decent DVD players out at the £100 mark. And playing DVDs on the playstation was cumbersome, with no LCD on the player it was hard to see on the fly what chapter or time you are into the movie, and it cost more to get that remote as well.
So before long, the PS2 was just another regular console, any multimedia advantages were gone. The PS3 will head the same way i am sure, the fact that it is built in, it will be limited by a lot of ways such as regions. It is much easier to buy a dedicated HDDVD/DVD player that is multiregion than the chip a console (if that is even legal anymore). Add to that, while Blueray is still like a cloud somewhere, HDDD is here, you can get a Samsung HDDVD player for sub £100.
The majority of people who buy the PS3 will be gamers, anyone who want to get a HDDVD or Blueray player will get a HDDVD or Blueray player. I still play CDs through a CD player (allbeit a £500 CD player) and not my DVD player, even thou it could theorically save me some shelve space. Gamers might use the PS3 for more than 1 thing, and its multi media capability. The chances of dragging in the gardgets/treatre audience IMO is virtually nil, people who are into HiFi, Treatre set up by nature are purist. They like and want dedicated machines that does one thing and be best at it, they would spent £300 on an interconnecter but they wouldn't spent £400 on a PS3 because it's a games console. They would spent the same amount on another dedicated Sony Blueray or HDDVD player thou because they know they is no corners cut for other things.
Nintendo stuck to the basic idea, it made a games conole, nothing more. People buy consoles to play games, and that is what they got. By cutting all the multi media crap out, it saved them money, save in R&D time, and increase profits. They went for an different audience, in a way, a much more harder audience and then got some more by surpise no doubt, grannies player Wii? Who would've thought !