^^
By 2011 PS3 will already be able to sell at less than $200, so it would be in a market and segment different from newer gen consoles, more similar to what was PS2 at XB360 launch.
But as I wrote, there are more immediate dangers than Sony for MS: Nintendo could currently do what it wants with living room computing market, and if it reckons it's lucrative, it will grab it. And MS can't really do anything right now, only weakening Wii first it could counter Nintendo moves with some hope of effectiveness. And Wii won't get weaker until a very large majority of households will already have HDTV's, so anticipating too much XB720 would leave it defenseless to the fury of Wii in the immediate, and after, to be superseded by a more powerful and less expensive PS4 released later in HD market.
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