I don't agree if by "knock out punches" you mean leaving the 360 in the dust or ever becoming a threat to the Wii. True killer apps are few and far between, and while AAA games do help sales, I don't think they're going to be enough to create a seismic shift. Squilliam has a point; the only games that matter are the ones you don't have. Once most people are locked into a console, I don't think they care to acquire a second one even if it has some attractive games, so long as their current console continues to entertain them.
As for price, we're not even at $299 yet, so there's no telling how long it will take for the PS3 to reach $249. By this time, standalone Blu-Ray players will be dirt cheap, and meanwhile, more and more people are making their selection for this generation of consoles. Sony can improve its position, but it hasn't a hope in hell at first place, and the longer it takes for "the year of the PS3" to finally arrive, the slimmer its chance of even taking second.
