Despite all the doom and gloom the PS3 is currently getting, Microsoft are the ones potentially in a really tight spot right now. Now that the Christmas bargain rush is over, 360 and PS3 sales will fall back to being within 50,000 every week. At that point it doesn't come down so much to which console is cheaper, but more so which console has the latest and greatest releases. (See Jan-Sept 2007 & 2008 for reference)
In that aspect, Microsoft is fighting a lost battle. The 360 doesn't have a single upcoming exclusive this year that is sure to sell a significant amount of systems. Ninety-Nine Nights, Dance Dance Revolution Universe, Blue Dragon, Mass Effect, Lips, Scene It?, Splinter Cell, and espeically Forza Motorsport and Halo have already saturated the 360's market. They'll all sell huge amounts of software for sure, but the effects of their releases on weekly hardware sales will be negligible at best. Alan Wake and Ninja Blade, as new IPs, could both potentially have a sizable impact, but only if they're extremely well-recieved by critics and heavily marketed.
PS3 on the otherhand has a ton of significant next-generation premiers coming in 2009 such as Final Fantasy XIII, Gran Turismo 5, God of War III and Killzone 2 all of which should combine to move millions of consoles for Sony. PS3 also has quite a few promising new IPs such as M.A.G, Quantum Theory, White Knight Chronicles, Heavy Rain, EyePet, and Demon's Souls, which all have the same potential to be runaway hits as Alan Wake or Ninja Blade. Furthermore, now that the PS3 with the upcoming 45nm Cell revision coming around March, the PS3 will be profitible and be able to ride profits all the way into Q4 when the PS3 will cost about $325 to manufacture. At that point, Sony will issue a $100 price drop in every region combined witht the scheduled releases of Final Fantasy XIII in Japan, Gran Turismo 5 in Europe, and God of War III in America. Needless to say, Sony stands to handily win 2009 all together due simply to Q4, the same way Microsoft did in 08, if Microsoft can't come up with something to drastically spur 360 sales.
That being said, there's really not much more Microsoft can do. They almost definitely can't afford to drop the 360's price by $100 because they'd be breaking the base manufacturing cost for the system and could likely end up selling the system at a permenant loss. On the otherside, a $50 price-drop would look weak and likely wouldn't be enough in comparisons with a $100 price drop from Sony, especially with all the blockbuster hits Sony has for Q4 in every region.
