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Outside of Japan I would say Microsoft is doing alright and is probably waiting for a good opportunity to capatalize on its earlier launch/larger userbase, lower manufacturing costs and strong line-up ... If I were Microsoft I would be anticipating Sony having a disapointing E3 for several reasons; the main one will be that, although the games are demonstrated, several of the highly anticipated PS3 games will be delayed to TBA 2008. This should mean that Microsoft will have (in many ways) a better line-up through 2007 than Sony will ... As I see it, after E3 Microsoft will be anticipating people being disapointed with the PS3 and excited about the XBox 360 so it should be an ideal time to drop the price of the XBox 360.