How,then,does Sony expect to sell a sub-$500 console with the same funtionality(BLu-ray) built in it? "It somes down to a multitude of things" says our source. "On a basic level, the PS3's CELL and RSX chips can handle most of what a stand alone Blu-ray player's various circuitry has on their own." Mostly,though,it's betting on the format."Sony really sees Blu-ray as a sure fire success. They're betting almost everything on it, and so they're going to take a pretty big loss on PS3 early on," confides a top PSM contact. "The format's massive storage capacity is awesome for devolpers, but a lot of us are still not sold on the viability of the format outside that." They added, "But,hey,who thought UMD movies would be so popular?"