No matter what Sony does MS will have a counter. LBP, MGS4, and KZ2 have pretty much shown that exclusive games will have an impact in increasing sales, but it will not change the tide long term.
Last year when the PS3 was $400 and the 360 Pro was $350 sales were slightly in the PS3's favor. Lets not get carried away and say that they were blowing them away. Even then it would have taken years for the PS3 to catch up worldwide with the 360.
At this point they should just continue doing what they are doing and focus on profitability. Last place doesn't mean that they are a failure. They already have a big enough install base that all major 3rd party games will be released on the PS3 (minus exclusives). If they can afford a price drop then by all means do it but don't do it because they think they are going to catch up to the 360.
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