The thing with 360 is that Microsoft is content to just keep PS3 at bay. Since Sony practically did that job for them by pricing the PS3 so high, Microsoft has gotten really lazy with the 360.
Seriously, there should have been a price drop months ago. If not last Christmas then at least this spring. Now that there finally is a price drop it's $50 or less for every SKU. At these prices, Wii has absolutely nothing to worry about. I don't think it had anything to worry about anyway, but Microsoft could at least have put itself in position to get a much larger chunk of the traditional gamer market by dropping the price of the Premium closer to Wii territory.
Now, that's not to say 360 is in huge trouble or anything. It's probably not going to be #1 this generation, but that's a reasonable sacrifice to achieve some profitability. With the price cut and a few big games I think it will outsell PS3 this holiday season - maybe not by a huge margin, but enough to remain comfy.
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