I agree MS had nothing to do with the tarnishing fo the brand, it was SONY who squandered it over the past few years but I think it benefits Xbox the most.

Here are a few that come to mind...

-Delayed games
-Loss of exclusives
-Sony's laughable E3 2006 presentation
-Console sales not living up to expectations
-Exclusive sales not living up to expectations
-Lack of JRPGs
-Exclusives that flopped
-Timed 360 exclusives
-Mocking of Sony fanboys
-Price of PS3
-Negative media
-Inferior version of many multiplatform titles
-Unreal Engine 3 problems
-Sony's lack of direction
-Exclusives 360 DLC for some multiplatform titiles
-360 lead console for many multiplatform titles
-Failure of Sixaxis
-Sony arrogrance

@Xxain

I don't know Xxain, the money I spent and games I traded for the PS3 could have gone towards a gaming PC. Even with the great upcoming games I can't justify the money I invested in my PS3 or the time I spent waiting for the great exclusives. Many of my favorite games this gen are PS3 exclusive but a few good games just isn't enough. As I said, I'm not going to ever consider buying a console at launch again. I doubt that I'll buy another Sony system within the first three years in the market.

Getting the superior version of almost every multiplatform game.

Because of this, 90% of the PS3's library is obsolete and the 10% that are exclusive, 5% are terrible so really MS reduced Sony to a $400 -$600 box that is 95% redundant and only 5% worthwhile.

Xbox didnt tarnish anything. Im enjoying my PS3 as much as i've enjoyed my PS1 and PS3.

MS didn't do that SONY performed a HARA-KIRI this gen, thats all

While most past multiplatform games have been proven to perform better on the 360 when you compare them side-to-side, they are usually so close as to offer the same experience to the gamer if you just happen to play them on their own.

The end line is always that exclusives make all the difference, and given their quality I bet that exclusives make for much more than 10% of most PS3 owners. I for one only own exclusives, though I could grab a used copy of RE5 in the future. And not because I don't buy multiplatforms, but simply because the lineup of exclusive games was the best for my tastes and - I bet - for those of many others.

I'd be glad if Capcom made a better effort with their engine on the PS3, but meanwhile I can live with slightly worse shadows in RE5, but playing Uncharted, MGS4 and LBP. Because i can't do that on the 360, it makes the PS3 100% worthwhile, you see. And for my $400 I got wireless, HDD, free online gaming and a top-tier Blu-Ray player, so it was also cost-effective against building up the setup I wanted on a 360.

As you see, what is worthwhile and what is redundant is all a matter of perspective.

By the way, I'd be curious to know how exactly half of PS3's exclusives could be considered terrible. The only one that comes to mind is Lair, really.

Back to OP:

In a sense, yes, that's the whole point of MS' adventuring into the console market, and they accomplished their goal. The utter dominance that Sony had last generation ended, and we're back to what has always been true, ie that there are several big players in the field.

I wonder how young is anybody who finds Sony not being the end-all brand for a console so baffling. Sony was not a big name in gaming a few generations ago.

I think the only thing you could say about the Sony exclusives to date is that for the most part none have performed in the realms of the high expectation levels. This has lead to a feeling for failure and I would not say any failed.

What this has done and the Xbox has helped is made many ask why have exclusives when I can get more money either by arranging a timed deal or going multi and that is one thing that has hurt the PS3 big time.