@Seihyouken,
Interesting how you believe that Sony while the economy is in terrible shape and Sony in terrible shape will cut price by $100. You state that the PS3 is borderline profitable now. Do you really think that going from borderline profitable to $100 loss per console will really happen? As for special bundles to help offset costs. I dont think so. By the time the fall rolls around the standard drive will probably be a 160GB drive (this keeps the costs down) and the standard driveon the 360 about the same.
To think that a PS3 still double the price of the Arcade will outsell the 360 is nuts. Momemtum for the 360 is just going to grow and MS has the upper hand to respond with price cuts. And Software wise when a console has sold 30 million units no software will make a dramatic difference. Even now Killzone 2 did what maybe a 100K bump for the PS3. Hell even a 1,000,000 bump wont help so dont expect GT5 to help close the gap.
Its libraries that sell systems not a single game.
