They are doing pretty terrible, no doubt about that. Nonetheless, if they can manage not to fuck up the PS4, and release it at a reasonable price, (and not lose billions in the process), this could be an unfortunate misstep, not a fatal blow. There are a few things that could help them in the future:
1. It appears more people _want_ to buy a PS3 than a 360. In the whole realm of things, considering the price difference since last year's 360 price drop, the gap in sales isn't horrendously big. They were also outselling the 360 until said price drop. They aren't going to catch up to MS and close the gap, but they could very well end up consistently outselling them if they play their cards right.
2. IIRC, the Saturn was neck-in-neck with the PS1 in Japan until FF7 came out. After that the PS1 took off and never looked back. Perhaps a similar effect (albeit, less drastic) could happen with FF13. I doubt it, but the sales spike for the FF7AC Blu Ray/FF13 Demo indicates there might be something up... Still, that's only Japan, FF13 is not going to be a huge system seller in the Americas, especially with the 360 version.
3. In general, they have a pretty strong lineup of games. Almost every 3rd party game is multiplatform, and for the most part the PS3 versions don't suck anymore. The exclusive lineup is comparable to the 360's. Depending on your tastes, either exclusive lineup could be called better.
