tuoyo,
1) plenty of people will wait for a cheaper console. The 360 is already at that point and so it's gaining some of the market that previously had a PS2. But you only have to look at the continuing sales of the PS2 to see plenty of people want to buy a cheap Sony console.
2) see above point about PS2 sales.
3) I agree 100% with you. Wii will be the success story of this generation.
4) Again I agree here that Nintendo are in a much better position than Sony - tons of room for a price cut if it ever looks like one is needed! But I think Sony are in a better position than MS here.
For point 4, it comes down to where you see the consoles as being in their lifecycle. Obviously, PS3 hardware-wise is a year behind. And arguably I think it is a further year behind software-wise. I think the prime years for PS3 are still ahead - I do believe the prices need to be lower, but I'm not sure that needs to happen right now.
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