The answer to why Sony has not enabled their HD scaler entirely on the PS3 is simple, and it has nothing to do with any technical mumbo-jumbo or the fact that Sony wants you to buy a new TV....
The launch of the PS3 served Sony in two ways. It put their new hardware on the market, and it also made available to the mainstream public (well, those willing to spend $500 - $600 dollars, anyway) their new disc format in all of its glory.
You may be asking, "what does this have to do with hardware scaling?" Well, as an accounting/finance major and avid video gamer that has examined the numbers of Sony for the last two years quarter by quarter, I will tell you that their earnings per share has shrunk considerably over that period. Their liabilities have also increased substantially over that period as they made more and more expenditures gearing up for the PS3 launch.
It is no secret that Sony was banking on a big launch to not only get their new video game hardware into homes, but to also put a Blu-Ray player in those homes as well. It is also no secret to anyone that does a little research that Sony is selling their hardware at a loss for the moment. So a company that has seen EPS shrink and liabilities grow over athe last few years is selling their company-saving system at a loss? What gives?
It is not the hardware that they are banking on saving their company. Sony knew going in that they would not see a profit on hardware sales until at least the third quarter of next year. They could see immediate profit, however, on blu-ray disc sales.
Is the lightbulb clicking on for any of you yet?
Here's the key for those still in the dark: Most consumers are not demanding videophiles, especially not the youth that many parents bought the system for. In fact, many consumers have their own standalone DVD player - most of them without upconversion - and in comparison, the PS3 does no better or worse job of playing DVDs than this unit. The consumers that do have upconverting DVD players won't be bemoaning the absence of upconversion on the PS3 for the most part either. Were upconversion turned on, they would be perfectly content to sit at home and watch up-converted SD-DVDs all day without ever worrying about Blu-Ray.
Sony didn't like that prospect. So what did they do? They kept the scaler off and packaged each launch unit with a shiny new copy of "Taladega Nights". Most people that bought the system did so for their kids, or simply because it was the newest piece of technology out ther for video games. They were (and likely still are) oblivious to scaling, upconverting, or anything else that has to do with the hardware or picture quality of the PS3. Sony was banking on their ignorance, because what those consumers did notice - without being aware that Sony was doing this on purpose - was that their current collection of SD-DVDs didn't look nearly as special as their shiny new copy of "Taladega Nights". The difference is astounding, and suddenly, the oblivious consumer that would have not worried about the Blu-Ray capabilities of the machine before are now hooked.
Sony kept the scaler off to emphasize the difference between SD-DVD and Blu-ray - and to push the sales of their new format. This helps them financially through sales, and indirectly because they can point to those sales numbers, and the numbers of units they have shipped, and say that theirs is the format that is gong to take off. It is a shrewd move by Sony, and one theat ultimately won't hurt them, but help them. It also helps all of us PS3 buyers that are hoping Blu-Ray doesn't go the way of the Beta Max.
There you have it folks. My not-so-conspiracy theory on why the scaler was not originally, and has not yet been turned on, despite its presence in the machine. It's not that they can't, or that they want you to buy TVs. They want you to buy Blu-Ray movie titles, and to entice you to do so, they will purposely make SD-DVDs look as poor as possible.
Now all of you CAGers that are upset about having to play Resistance in 480 are saying "well that's not fair! Why should I suffer?" The answer to that is that Sony has fooled you too. They have enticed you with promises of firmware updates, and mad speculation that the scaling issue will be fixed in the near future. What are you going to do anyway? Return it? After waiting so long for it to come out? They even try to make you feel like it is almost your fault for having a TV without support for 720p. But fear not, PS3-ers of the world. Papa Sony is working on an update - and it will be released as soon as Sony has sold enough Blu-Ray discs.
All of that said, I
love my PS3. Gran Turismo HD, Resistance, Madden, Marvel, Blast Factor, Need for Spped, and other games have kept me busy and content - oh yeah, my TV supports 720p.
Games run just fine for me, and as for SD-DVDs.... Sony's ploy worked on me. My Blu-Ray library now includes 12 titles, and I am considering picking up another today.....