A relatively cheap PS3 Slim is inbound. Let's talk Microsoft's response.

[Squilliam]

WereKitten said:

^ I take you're talking about persona (b) i.e. someone who is considering to buy a console. Thus he's either familiar himself with using a controller or can buy a pretty Sony remote for $20. I don't think he'll sweat it, as he'll also have to buy cables and other accessories whatever console he chooses.
As for Netflix: zero value outside USA. And while Sony can add video rental and subscription services too (I think they announced some today for several european countries), the 360 is not getting BD. Which incidentally becomes the more attractive the lower the cost of the movies drop, and the more diffuse HDTVs become.
Anecdote: I noticed yesterday that my local Mediaworld store has almost doubled the shelf space for Blu-ray movies (I'd say it's now about 15% of that of DVDs) and is selling a good number of them at 15-19 euros, which places them in the same bracket as newish DVDs in the same store.

Yep persona B. However I consider persona A to be irrelevant when talking about consoles, the idea that a lot of people buy a PS3 solely for Blu Ray at this point has been debunked.

The attraction of BR relies on whether or not the person has or has not bought an HDTV and whether or not they have or have not bought a Blu Ray player already. Its really hard to say at this point what the market dynamic is because its a complicated issue with no easy answers.

Btw: The Xbox 360 has on demand services with Sky in the U.K and someone else in France as well. So you could say their on demand service covers ~55% of the worldwide gaming market at this point with regards to Netflix or similar.