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PS3 might be beating XBox 360 in world wide sales right now, but sony is also still hemorrhaging money all over the place with PS3 while microsoft is now actually in danger of profiting off of XBox this quarter. Who do you think is going to be able to make a price cut in early to mid 08? This price cut is the one that matters, the one that makes the HD consoles affordable to the general public. If the premium goes down to $300 or lower with PS3 40gig still at $400, game over.

And in case anyone is wondering where my biases are, I am all nintendo. Microsoft and Sony can both suck it.