Mate stand your ground on this. I recommend you writing a letter straight to the store manager.
Direct him to the Sale of Goods Act 1979. By law if there is a transfer of goods/poperty, then in the contract between the seller and buyer, there will be implied terms that:
a) the goods sold will be of satisfactory quality; and
b) the goods sold will be reasonably fit for purpose.
Clearly the the ps3 isnt satisfactory qualitiy, otherwise it would work and it isnt fit for its purpose because it can't play blu rays or ps3 games!
If you want to read up on it, its section 14 of the Sale of Goods Act 1979.
If you need any more help, pointers I'm happy to help
ps, i forgot to mention if they offer store credit, then take it aslong as you want it, but legally you are entitled to a replacement ps3 (brand new) or your full money back.