The biggest problem wasnt the price or the late launch, it was the loss of exclusives. i've heard Sony failed to provide enough dev kits to Ubisoft or Bioware, and thus lost Assassin's Creed and Mass Effect as exclusives. MS is rumoured to have paid $100 mil to Rockstar for GTA4 to go to the 360 as a multiplatform. other important exclusives as well like RE5 or FF13. and the Sony first party was comparatively weak compared to the third party.
but the 2nd and 3rd strike was the price and the loss of at least 1 year on it competitors. and for some reason despite being the worst of the 3 consoles, having the worst launch line up and the highest price its still doing pretty well. as long as they release at a competitive price to their competitor, have a solid launch line up - then it could happen.
