Yeah, a lot of people seem to forget the fact that the PS2 not only had a DVD drive, but it was often even cheaper than a standalone DVD player when it released.
A lot of families justified the purchase partly on wanting to get a DVD player, and it actually being a relatively affordable option considering that it also played games for the kiddos. Sony definitely pushed the feature well.
The playback quality wasn't the same, but that didn't matter all that much for the average consumer with a CRT. There's also studies out there pointing to the fact that people will tend to buy a product based on its number of features or functions, even if they don't plan to use them.
Perfect positioning for Sony, bad timing for Sega.
Fun thread still kicking around from 2001 with tech enthusiasts discussing buying a PS2 vs DVD player:
link
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Also yeah, the Vice City port has been in beta for a while now, pretty cool!