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Yes, the PS3 is selling badly!

If you compare the PS3 to both the PS2 and N64 (the past 2 follow ups to market leading consoles) you'll notice that the PS3 is selling at a slower rate than either console; this is so dramatic of an indicator because the market is much larger today than it was when the N64 was released, gamers are older and many of these games have more money (which could indicate they are more likely to buy an system early in its life when it is expensive).