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Looks like Reggie thinks the PS3 has 'challenges'.

“What worries me, if I would focus in on Microsoft, we’ve always looked at what they’ve been able to do from an Xbox Live standpoint and we constantly want to say, ‘What can we do to be better than Xbox Live?’…It’s a little hard [to say something nice about the PS3]…They’ve got some great games that they’ve been able to bring out, they’ve been able to get some fantastic content. But, you know, you look at the results and clearly they’ve got some challenges.”

http://www.nintendoeverything.com/?p=13923