Sony needs to go into niche mode. It needs to find its strength and solidify it into a full advantage. I think that Sony needs to really focus on BR now. Because it's the only upside that it has right now. They need to quickly bolster the BR release library (much more easy to do than building a game library) and promote it as the cheapest (msrp) retail BR player on the market (and you get PS2 compat for free!). It needs to focus on beating the 360. Forget about the Wii, you can't attack it while it's the media darling and anything you do will just be interpret it as a me too or jealousy. The key is to take on an enemy it can beat. Investment into cell api development with partners will be key. Insist on the developers taking every advantage of PS3 possible and share the results. There is still too much security by obscurity among game devs to maintain advantage. If the feature is compelling enough to be a requirement for a game, chances of it being an exclusive increases greatly and its sales will drive PS3 sales. Downside is that first parties have less advantage against 3rd parties If they can demonstrate that they can consistently outsell 360 in all territories for the rest of the year despite 360s larger base and library, it will be in a much stronger position. If the free home can steal Live userbase, even better. This means that 2007 will still be a loss year for scei (no avoiding it no matter what), but it means that profitability in 2008 is possible. If scei cannot cut their loss