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The moment the PS3 drops to 299EUR/$299, slim or no slim, is the moment the bottom falls out of the 360, which is barely outselling the PS3 despite a $100-$150 price advantage and plenty of multiplatform titles.

Microsoft has noone to blame but itself. They sold faulty hardware, denied the problem and then bought off consumers with $1 billion of cash extracted from their OS monopoly, and have been underinvesting in first-party studios and innovative games. As a company, Microsoft lacks the consumer savvy and media skills to succeed in a gaming culture which is ever more closely dependent on the good will of Web-savvy consumers and the talents of open source-savvy studio artists.

It's all a darn shame. I'm a firm believer in console neutrality and competition, but Microsoft went and handed the HD market on a platter to Sony. I think Microsoft seriously needs to ask whether it needs to be in the console biz. Given their core strengths as a company, it may be time to start a joint-venture with Samsung or some plucky startup firm who knows hardware, and concentrate on software and services. If they don't, then the X720 will be just more of the same.