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Sony should not worry about what place they come in for this generation.  They should definitely not sacrifice future profits so they can gain market share.  They need to bundle in games and Blu ray movies to give the system value without raising the price.

They are losing the PS2 install base to the 360 because there is no reason to upgrade from the PS2 to PS3.  Bring back BC so they can convert those PS2 owners.  Being able to play your PS2 collection in upscaled HD is something the 360 can never do.

Release GT5 asap as that is a system seller.  Seems odd that none of the flagship series have been released in the first 2 years of the PS3.