All Microsoft needs to do is keep doing what they're doing. They have a strong lineup, cool stuff coming up, and a very very solid user base. There's also a little game called Halo Reach coming out this year. Natal will most likely move some hardware and/or software.
But you cannot count the PS3 out, it's true. PS3 exclusives are getting to the point where they're almost always guaranteed to be awesome, and their most anticipated ones haven't even come out yet. Plus, while the Zune Marketplace has added a lot to the media capabilities with the BluRay quality instant streaming, the PS3 really is the only "do everything" console on the market.
If you are a 360 fan, just be glad that Sony is there to give MS a run for its money and keep them honest. If you're a PS3 fan, just be glad that Sony is still very much in the game, gaining ground fast, and putting out great content all the time as a result of the sales deficit.
This is a win/win situation for fans of either HD console.
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