At this point, I say they should simply focus on making a profit, and keep their current base of fans loyal to them, with great games and a great customer service (which includes making a reliable hardware in the first place).
While the PS3 is infamous for its fanboys, those fanboys are the support base of each company, especially for companies such as Nintendo. There'll always be a swing group, and both Microsoft and Nintendo will make the same mistake as Sony, if they think that their current console owners will stay with them due to loyalty.
I'm not a big buff or an expert on this, but I think that the PS3 is finally starting break even. Although a price reduction could boost sales, I think it'll jeopardize Sony's chances of going into the next generation, and that the return will be too little. People simply don't know about the PS3's games or features nor do they care to research it, but will only learn about it with top notch marketing. Sony completely failed to do that, and they're not in a position to be able to get their own soda can for a game.
So they should try to do what any general does, which is to calm down, see what can and can't be done (no, the PS3 can't outsell the Wii this generation), then rally his routing troops, and come back strong the next battle.
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I say they should use the current technology they have now (Cell and Bluray), and simply buff the hardware like the 360 has done. The 2 technologies will get cheaper, so they can avoid the $700 price tag fiasco.
They should keep building and supporting their 1'st party developers, by earning profit, reputation, and fans with each game. They should continue maintaining their relationships with the 2'nd party developers, and reach out a hand to as many as they can (especially "indie" developers with their promise to match the budget for PSN games). With all this, they have a plethora of games for launch, contrasting with the lackluster launch title list they had for the PS3.
They should keep improving the PSN, and if they are ever going to talk smack, talk smack that it is or will be as good as LIVE (and make sure they can truly back it up). If the PS4 ever turns out cheaper than the 720 (for argument's sake), then they can turn the tables and say that they are the cheaper choice, with a cheaper system and free online.
Finally they should create and save enough funds for a marketing blitzkrieg. They can't go halfway through like they did with Killzone 2. It has to be all or nothing, or no one will really remember with the short attention span they have when they're watching TV, relaxing from a hard day.
If not, then they better at least get a creative (the good kind of creative, no more crying babies), marketing team to make attention grabbing ads.
