About the only thing going for them still is brand equity. Comparing a PS3 to Xbox 360 there are still many people who will pick the former over the latter because its the name they know/trust and they will still continue to pay a premium when the former is the brand they wanted originally.
The problem they have is twofold:
1. They look like they are losing. The news, sales clerks, friends/family are revealing now that the PS3 is last place. This eats away at the brand equity because if a console is percieved to be losing there "must be something wrong with it".
2. They are losing the war on the ground. The best way to lose brand equity, or gain it is to win/lose market share. The chances you'll know someone with an Xbox 360 is much higher than someone with a PS3. Its eating away at the other advantages the PS3 has over the Xbox 360 and diminishing its value.
- When the Xbox 360 gains market share over the PS3, Xbox Live's value increases and PSNs decreases. It doesn't matter if PSN is free if all your friends are on Xbox Live.
-Word of mouth is a powerful ally to marketers. There are simply many more people with Xbox 360s now, especially in the United States but even in Europe the brand is winning acceptance as a viable alternative now that enough people own and advocate for the system to their friends/family.
Tease.
